Budget 2014/15: Government

May 14, 2014
Taxation

Reducing the size of Government

In addition to freezing wages, the Government has put in place a wide reaching program to reduce the size of Government over the next four years.

Merging by 1 July 2015:

ComSuper with the Commonwealth Superannuation Corporation
National Blood Authority with the Australian Organ and Tissue Donation and Transplantation Authority
Private Health Insurance Ombudsman into the Office of the Commonwealth Ombudsman
All of the Commonwealth merits review tribunals with the exception of the Veterans Review Board

Abolished by 1 July 2015:

Private Health Insurance Administration Council
Corporations and Markets Advisory Committee (CAMAC) and the CAMAC Legal Committee
Albury-Wodonga Development Corporation
Australian River Company Ltd

A raft of committees within the agricultural portfolio have also been rationalised.

In addition to this, a number of government departments and authorities have had their funding slashed or initiatives deferred including ASIC ($120.1m slashed over 4 years), the Australian Taxation Office ($142.8m over 3 years) and the CSIRO.

Plus, as previously announced, Medibank Private Limited will be sold with $90m provided to help with the sale.

Reducing emissions

As previously announced, the Government has set aside $2.55bn to establish the Emissions Reduction Fund to provide incentives to help Australia reach its target of reducing emissions to 5% below year 2000 levels by the year 2020.

The Clean Energy Regulator will conduct auctions to purchase, at the lowest cost, emissions reductions that are additional to normal business practice.

Date of effect: 1 July 2014

Fair entitlements guarantee (FEG) redundancy payments scaled back

The FEG covers certain unpaid employee entitlements in the event of insolvency or bankruptcy.
Redundancy payments under the FEG scheme will be aligned to the National Employment Standards (NES) in the Fair Work Act. From 1 January 2015, the maximum payment for redundancy pay under the scheme will be 16 weeks.

From 1 July 2014, indexation of the Maximum Weekly Wage used in calculating entitlements for claimants earning above the Maximum Weekly Wage of $2,451, will be paused until 30 June 2018.

The changes will apply only to liquidations and bankruptcies that occur on or after the commencement date.

Infrastructure spending

The indexation of fuel excise is being spent on a wide array of infrastructure projects.

New investments include:

$1 billion for East-West Link Stage 2 in Melbourne, which combines with a further $500 million being provided for the project from existing Infrastructure Investment Programme funding, for a total $1.5 billion investment to 2018/2019;
$866 million for the Perth Freight Link in Western Australia, taking the total Federal investment in the project to $925 million;
The Toowoomba Second Range Crossing in Queensland;
The North-South Road Corridor in Adelaide;
Northern Territory road upgrades;
$229 million for a National Highway Upgrade Programme;
Additional funding of $200 million for the Black Spot Programme; and
Additional funding of $350 million for the Roads to Recovery Programme.

Other investments include:

$2bn loan to speed up Stage 2 of the WestConnex project in Sydney
$2.9bn over 10 years towards roads on the Western Sydney infrastructure plan
$77.8m to establish a Western Sydney Infrastructure unit to manage the development of the second airport at Badgery’s Creek.

National Rental Affordability Scheme to be discontinued

The Government will not proceed with Round 5 of the National Rental Affordability Scheme. Funding for tenanted NRAS properties will not be affected.

Insurance support in North Queensland

The Government has provided $12.5m over 3 years to the Queensland Government to provide grants to bodies corporate to undertake engineering assessments of strata-title properties in North Queensland. The assessments are to identify risks that can be mitigated.

There is also a website being established by the Department of Treasury to develop an insurance comparison website on strata-title and home building and contents insurance offerings in North Queensland.

To discuss how this may impact your circumstances please contact PPT on (03) 5331 3711.

DISCLAIMER: The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.