BUDGET ROUNDUP: EDITION TWO
With only four weeks till the budget will be announced, speculation is growing over what it will include, and just how big that deficit will be.
It will be the 10th year in a row that the budget will have a large deficit. Gone are the days of Costello and ‘Australia paying off the mortgage’! Scott Morrison’s budget will attempt to get the deficit below $30 billion. We are currently spending $1 billion per month on interest payments alone. Any savings measures that the government put in place will only be able to slow the rate that debt is growing, not to reverse it.
1. Infrastructure Spend
The Government is focused on passenger rail projects and the Federal Infrastructure Minister Darren Chester has suggested that regional rail in Victoria will be the big winner in the May Federal Budget. Suggesting that the much debated railway line between Wodonga, Bairnsdale and Warrnambool will be completed.
2. Housing Affordability
In hot debate is housing affordability which is impacted Australian’s across the country. It is likely to include a scheme for first home owners to be able to access their superannuation to help them break into the market, tax breaks for downsizing retirees and improving supply by releasing federal land for housing. There may also be a review of foreign property investment. But there is no silver bullet, these measures will provide some relief and lay groundwork for future budgets.
3. Tech Innovation
The government is focused on innovation and supporting tech companies. The federal assistant minister for digital transformation has announced that there will be $900 million each year to be spent on entrepreneurial tech suppliers. This won’t be done just through handouts but rather through contracts. Technology work in the public sector is worth $9 billion a year and is traditionally done by larger companies such as IBM and HP. However, the government has now committed to spending 10% of its tech budget on small-to-medium technology providers.
The assistant minister Angus Taylor has said that it would be “probably the biggest investment in innovation in this country’s history”.
This is great news for Australian tech companies that are looking to expand and grow their businesses that previously wouldn’t have been eligible to get a government contract.
The budget debate is heating up and there is great speculation over the budget. However, this is a government that is in a financial crisis. Teetering on the brink of a recession this budget is critical in delivering security to people’s houses and jobs.
Stay tuned for Edition Three or get in touch with any questions you want answered contact us so we can make sure we keep bringing you relevant updates throughout the leadup to the Budget in May 2017.
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