It was a budget that was all too aware of the failings of the one that went before it; and while it reported a swollen deficit of $35.1 billion for 2015-16, it contained plenty of sweeteners to both stimulate the economy and placate its critics.
There were few surprises last night with the big-ticket items having been released in the lead-up. Small business was given a 1.5 per cent tax cut, with tax-deductible purchases up to $20,000 being offered to all small businesses, including those that are un-incorporated.
The economic outlook sees GDP growth of 2.75 for 2015-16, with unemployment likely to push higher, to 6.5 per cent. The budget is forecast to get back to surplus in 2019-20, but we recommend taking that with a grain of salt.
A $4.4 billion families package is to be focused on direct assistance to childcare centres, with assistance to fund nannies for shift workers having been announced previously.
Cuts to foreign aid had been foreshadowed in last year’s announcement; the details revealed Official Development Assistance (ODA) to Indonesia will be cut by 40 per cent, from $542 million to $323 million. While PNG will become our biggest ODA recipient with a slight drop in aid leaving it with $477 million.
The defence budget also got a boost with $1.2 billion to be spent over two years to fight IS in the Middle East. ASIO will get $300 million to boost its capabilities and defence personnel will get a 2 per cent pay rise.
Overall there seems a refreshing focus on the economy’s desperate need for stimulus. Innovation is finally on the agenda and the Google tax should reign in the profligate tax dodging of multi-nationals, but this is just the beginning, as it remains to be seen how much obstruction the Senate will put up in passing these measures.