What’s in the 2018 Budget for the Sunshine Coast?

The Federal Government is sticking to its plan to build a stronger economy to benefit all Australians. This is a budget custom-made for the Sunshine Coast, and focusses on five key measures:

1. Provide tax relief to encourage and reward working Australians and reduce cost pressures on households, including lowering electricity prices. A seven year plan personal income tax plan for lower, fairer and simpler taxes, and immediate relief for low and middle income earners.
2. Keep backing business to invest and create more jobs, especially small and medium sized businesses through the extension of the Asset Write-off Scheme and legislating lower taxes.
3. Guarantee the essential services that Australians rely on, like guaranteeing the Medicare Benefits Schedule, record funding for hospitals, backing the Gonski Review and caring for older Australians.
4. Keep Australians safe, with new investments to secure our borders, including enhanced airport security and minimising biosecurity risks to protect our environment and agricultural, tourism and export industries.
5. Ensure that the Government lives within its means, keeping spending and taxes under control through no longer borrowing for recurrent expenditure, limiting payments growth to 1.6%, and ensuring multinationals pay their fair share of tax.

Please note that the following is not a comprehensive list of all budget measures. Rather, a headline summary of the major items effecting Sunshine Coast residents. Details on all budget measures can be found at www.budget.gov.au.

What this means for the Sunshine Coast

• $390 million to duplicate the North Coast Rail Line between Beerburrum and Landsborough and upgrades to the track and stations to Nambour.
• $880 million for further upgrades the Bruce Highway between Pine River and Caloundra.
• $800 million for the upgrade of the Bruce Highway between Cooroy and Curra.

1. Tax cuts

Over 126,000 people on the Sunshine Coast will immediately benefit from the low and middle income tax relief in 2018/19. For example, a high school teacher earning $75,000 will have an extra $530 in their pocket, with an extra $3,740 in their pocket over the first seven years of the tax plan.

Key initiatives include:

• Immediate tax relief for those in the low to middle income ranges. Those who earn up to $37,000 will see their tax bill reduce by $200, increasing incrementally to the maximum offset of $530 is applied to those earning between $48,000 and $90,000.
• Reduce bracket creep by increasing the top threshold of the 32.5% tax bracket from $87,000 to $90,000 from 1 July 2018, and up to $120,000 in 2022.
• Ensure more Australians pay less tax and make personal taxes simpler and flatter. From 1 July 2024 the Government will increase the top threshold of the 32.5% tax bracket from $120,000 to $200,000, removing the 37% tax bracket completely.

The above measures mean that around 94% of all taxpayers are projected to face a marginal tax rate of 32.5% or less in 2024-25.

2. Ensuring the Government lives within its means

The Government’s plan for a stronger economy is returning the budget back to balance, ensuring taxpayers’ money is spent responsibly and preventing taxes from damaging economic growth.

This plan has lowered the underlying cash deficit to an expected $18.2 billion for 2017‑18, further reducing to $14.5 billion in 2018-19 and to a balance of $2.2 billion in 2019-20. A surplus of $11 billion is projected in 2020-21 and surpluses are projected to continue, building to over 1% of GDP in the medium term.

Graph 1: Underlying cash balance ($M)

3. Supporting business

Over 40,000 small and medium sized businesses on the Sunshine Coast will benefit from the extension to the $20,000 Instant Asset Write-off Scheme.  Other measures include:

• Implementation of the Ten Year Enterprise Tax Plan, which will see the company tax rate reduced to 25% over 10 years for all businesses, ensuring globally competitiveness.
• Investing in transport infrastructure to make it easier to do business. This includes $880 million for further upgrades the Bruce Highway between Pine River and Caloundra, $800 million for the upgrade of the Bruce Highway between Cooroy and Curra, and $390 million to duplicate and upgrade the North Coast Rail Line to Nambour.
• $250 million Skilling Australians Fund to increase participation in vocational education, supporting more apprenticeships and traineeships.
• Increase to the unincorporated small business tax discount rate from 5% to 8%, increasing to 16% by 2026-27.
• The small business entity turnover threshold will be lifted from $2 million to $10 million.

4. Older Australians –  More Choices for a Longer Life

A suite of measures, totalling $5 billion over five years, mean local seniors will have more time and money to enjoy life on the Sunshine Coast.  Over 60,500 Sunshine Coast residents will benefit by boosting their financial security, helping those who want to work longer, and giving them more choice in their care. We will also protect older Australians from Labor’s Retirement Tax.

Key aged care and health initiatives include:

• The Pension Work Bonus will be increased to allow age pensioners to earn up to $468/fn (an extra $50) without reducing their pension, and for the first time it will be extended to the self‑employed, who can now earn up to $7,800/yr without reducing their pension.
• The Government will allow more people aged 65-74 to keep contributing into their superannuation through an exemption to the superannuation work test. 
• Expand the Pension Loans Scheme – full rate pensioners will be able to boost their income by up to $11,799 (singles) or $17,787 (couples) per year.
• The Government will provide advice on relevant skills and training to help workers build their careers or transition to jobs in new industries. For Australians updating their skills, the Government will contribute up to $2,000 through the Skills and Training Incentive.
• Access to the Restart wage subsidy for Australians aged 50 and over will be expanded, providing up to $10,000 to employers to support workers as they start a new career.
• $17.7 million in additional funding to support entrepreneurs, with a focus on those aged over 45yrs.
• $23 million in grants to support local community sporting groups for the over 65s. 
• $2.4 billion on new medicines including $1 billion to ensure listing all new medicines recommended by the independent Pharmaceutical Benefits Advisory Committee. This includes $703.6 million to list Kisqali® to support women with breast cancer. Without subsidy, patients would pay $71,820 per year. Listing on the PBS mean patients will have access to these medicines paying a maximum of $39.50 per script. Concessional patients, including pensioners, will pay just $6.40.
• $22 million to develop the National Plan on Elder Abuse including a national online register for enduring powers of attorney.
• Over $140 million to improve palliative care in residential aged care, managing dementia, and for mental health programs for older Australians.
• $61.7 million to make it easier to use MyAged Care, including simplifying the forms, and $7.4 million to trial face-to-face navigators to assist people to choose the aged care services that suit their needs.  
• 13,500 new residential aged care places and 775 short-term restorative places to be made available where they are most needed, plus $60 million for capital investment.

Details of the full $5 billion Aged Care package outlined in the budget can be found here.

5. Guaranteeing essential services

As well as the above commitments to providing better care and support for older Australians, the Government is making record investment in Medicare, hospitals, schools and disability services, keeping Australians safe and driving energy costs down:

Education

Over 48,000 school children and 70 schools on the Sunshine Coast will benefit from $24.5 billion more for education over the next 10 years – a 50% increase per student, on average, over a decade. Over 4,000 pre-school aged children on the Sunshine Coast can access 15 hours of quality early learning in the year before school.

Other education measures include:

• Supporting the recommendations of the Gonski Review.
• $247 million over four years to fund the School Chaplaincy Program at 3,000 schools, to support the wellbeing of and focus on anti-bullying measures.
• Increasing the Youth Allowance parental income cut-off for the regional workforce self-supporting independence criteria from $150,000 to $160,000, increasing $10,000 for each additional child in the family.
• $250 million Skilling Australians Fund to increase participation in vocational education, supporting more apprenticeships and traineeships.

Health

• Record funding for hospitals via a new $30.2 billion agreement with the States and Territories.
• The Medicare Guarantee Fund will fully fund the PBS and MBS, including $2.4 billion for all drugs recommended by the Pharmaceutical Benefits Advisory Committee to be funded by the PBS.
• $338.1 million for mental health including continued funding for suicide prevention, additional funding for Lifeline, Beyond Blue and SANE.
• $1.3 billion National Health and Medical Industry Growth Plan for rare cancer clinical trials, collaborative research projects and a focus on growing the Genomics Health industry.

• Fully fund the NDIS without the need to raise the Medicare Levy. This funding includes $64.3 million for the Jobs and Market Fund to support the growth of service providers and the disability care workforce. This measure directly helps an estimated 4,932 Sunshine Coast residents with disability and their families.

Full details of Health initiatives announced in the budget can be found here.

Energy

• Ensure the National Energy Guarantee which will see a $400 reduction to the average annual Australian household power bill, and providing certainty to the market.
• Creation of the Consumer Data Right for energy to help customers find the best deal and better manage their energy use.

Keeping Australians Safe

• Provide ongoing investment to prevent and disrupt people smuggling.
• Continue to fund Operation Sovereign Borders.
• Over $290 million for airport security, including enhanced passenger screening at regional airports such as the Sunshine Coast Airport, upgraded screening of air cargo and mail entering Australia.
• Maintain an on-going commitment to restore Defence funding to 2% of GDP by 2020-21.
• Investing $200 billion over the next decade for the Defence Integrated Investment Program to bolster Defence Force capability through programs such as the Land 400 Project which will see Land Reconnaissance vehicles built in Queensland, to ensure Defence personnel have the right equipment for the job.

6. Veterans

There are just under 6,300 veterans living on the Sunshine Coast. The Government committed an additional $100 million to veterans and their families in the 2018 Budget.  Details on all measures can be found here.

7. Those on retirement and investor visas (subclasses 405 and 410)

The Government has announced a pathway to permanent residency process will be established for retirement visa subclass 410 and investor visa subclass 405 holders. Details of this process are yet to be announced, but my office will keep a close eye on this issue and contact those who have already expressed an interest in being kept informed. If you live in Fairfax and would like to be kept informed about this issue, please contact my office at ted.obrien.mp@aph.gov.au or call 5479 2800.

8. Access to Federal Government Grants

The Federal Government recognises that grass roots and community groups should be supported in what they do best – helping the community. The following grants programs have been extended or will be established.

• Extend the Building Better Regions Fund for a third round – $200 million
• Extend the Stronger Communities Programme for a fourth round – $22.5 million ($150k per electorate)
• Extend the Safer Communities Fund for a second year – $30 million
• Establish a Major Project Business Case Fund to investigate new project proposals in Queensland – $250 million
• Expand a grant programs for local community sporting groups to cater to the over 65s – $23 million
• Expand the Local Sporting Champions grant program by a further 3,000 participants which provides support for elite young athletes to help with costs related to competing at a state and national level.
• Establish a sports infrastructure grants program for community sporting clubs to apply for infrastructure grants of up to $500,000 for small to medium scale projects or for improvements to existing or ageing facilities. This funding will provide an opportunity for community clubs to ensure they are able to meet the increasing demand on sporting services by building appropriate facilities – $29.7 million

There are of course many Federal Government grants programs already funded and continuing as part of previous budgets. Go to www.grants.gov.au to see the full range of available grants programs.

9. Craft Breweries

We have a thriving micro-brewery industry on the Sunshine Coast and the Federal Government has cut taxes on kegs to level the playing field and allow craft breweries to further invest in their business.

For details on the full measures outlined in the 2018 Budget, go to www.budget.gov.au.