How $6.3b Budget cut affects you

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The government will try to push through a $6.3 billion compilation of savings measures in parliament today.

Let’s run through the figures.


FEDERAL Parliament almost pulled an all-nighter as angry Greens and crossbench senators tried to frustrate the passage of the government’s budget savings measures.

But with the support of Labor, the Senate finally agreed to clear the Coalition’s so-called omnibus bill with $6.3 billion in budget savings.

The so-called Omnibus bill contains 20 cost-cutting measures including cuts to family benefits and climate change funding.

It was quickly passed by the lower house in parliament on Wednesday, but ran into a few roadblocks during six hours of debate in the upper house Thursday night.

The Greens accused the government of lumping 24 separate pieces of legislation into one boringly-titled bill to avoid proper scrutiny before giving in just before midnight.

So it’s a done deal now. The government has delivered tax cuts for the wealthy and big corporations, while cutting spending on Australia’s more vulnerable.

While it’s great news for those worried about Australia’s growing debt, of course someone has to pay. This is how the measures impact you:

IF YOU HAVE A UNI DEBT …

People who have a HELP debt will have to start paying it back sooner.

Currently you don’t have to pay anything until your income reaches $54,869.

But starting in 2018-19, this will be lowered to $51,957.

The starting repayment rate will be two per cent and this will gradually increase the more you earn.

IF YOU ARE A STUDENT …

The HECS-HELP Benefit, which pays graduates of some courses to take up related jobs in nursing, science and early childhood education, will be axed from 1 July 2017.

The government also hopes to save money by slowing the growth of research grants and other awards for current students. These payments will be increased in line with CPI (Consumer Price Index) instead of the more generous Higher Education Grants Index (HEGI).

Students getting help with upfront costs of study as part of the Student Start-up Scholarship, will no longer get the twice yearly payments of $1000.

From 1 July 2017, they will have to apply for a tax-free loan instead.

IF YOU GET FAMILY BENEFITS …

Those families earning about $80,000 will no longer get the Family Tax Benefit-A end-of-year supplement of up to $726 a year, after Labor negotiated for it to be dropped.

Higher income earners will face a cut in payments as the Higher Income Free Threshold will be frozen for a further two years.

The income test for paid parental leave will stay at $150,000 for another three years, meaning fewer will be eligible.

IF YOU WERE COUNTING ON THE BABY BONUS …

Those planning more children will no longer get a boost to their budgets.

The government wanted to give eligible families with a youngest child under one year old, an extra $1000 a year through an increase to the Family Tax Benefit part B.

But the payment has also been dropped after negotiations with Labor.

You’re on your own daddy.

You’re on your own daddy.Source:Supplied

IF YOU CARE ABOUT THE ENVIRONMENT …

Yes, ARENA and its renewable energy grants have been saved but what we’re really talking about is a change in how the funding is delivered.

The government was planning to strip the Australian Renewable Energy Agency of $1.26 billion in funding, which would essentially have abolished the agency that provides grants for the commercialisation of innovative renewable energy projects.

Following a deal with Labor, ARENA will keep $800 million over five years to deliver its grants.

But the Clean Energy Innovation Fund, will provides concessional loans or equity to companies, will lose that money instead.

So money for emerging technologies will be delivered as $800 million in grants, instead of as concessional loans.

The Clean Energy Innovation Fund was created by the Turnbull government earlier this year and is co-administered by ARENA and the nation’s renewable-energy bank — the $10 billion Clean Energy Finance Corporation.

IF YOU WANT TO FUND R D …

Despite its focus on innovation, the government will reduce a tax offset rate introduced to encourage companies to do research and development that benefits Australia.

The rates of the Research and Development Tax Incentive (currently about 40 per cent) — refundable and non-refundable — will be reduced for the first $100 million of eligible expenditure.

South Australia’s newest wind farm at Hornsdale was switched on to the electricity grid on July 7.

South Australia’s newest wind farm at Hornsdale was switched on to the electricity grid on July 7.Source:Supplied

IF YOU’RE CONCERNED ABOUT HEALTH …

People will find it harder to avoid paying the Medicare Levy Surcharge or to get the Private Health Insurance Rebate, as income cut-offs won’t be indexed for three years.

The National Health Performance Authority will also be abolished. The authority reported on the performance of public and private hospitals and primary healthy care organisations.

Its duties will be transferred to the Australian Institute of Health and Welfare and other organisations. Responsibility for the MyHospitals and MyHealthyCommunities websites was also transferred to the AIHW.

IF YOU’VE GOT A CHILD WHO NEEDS DENTAL WORK

Labor has been successful in protecting the Child Dental Benefits Schedule, which provides up to $1000 over two years for basic dental services.

The government was due to replace this with the Child and Adult Public Dental Scheme from 1 January 2017, which has stricter eligibility requirements.

IF YOU OWE THE GOVERNMENT MONEY …

Welfare recipients who rack up a debt will also be charged 9 per cent interest on this if they don’t agree to a repayment arrangement.

They will also be stopped from leaving Australia, with the government set to introduce Departure Prohibition Orders.

Previously the government stopped pursuing a social welfare debt after six years but this limit will also be removed so they can try and recover the debts for longer.

You won’t be able to leave the country if you have a Centrelink debt.

You won’t be able to leave the country if you have a Centrelink debt.Source:News Corp Australia

IF YOU’VE JUST MOVED TO AUSTRALIA …

Newly arrived residents generally have to wait two years before they can apply for most payments and benefits.

But family members of Australians citizens or long-term permanent resident used to be exempt. Not any longer.

Family members will now have to wait two years before getting access to social security payments and concession cards.

IF YOU ARE A PARENT …

The government will include income from Parental Leave Pay and Dad and Partner Pay when calculating income support payments for children born or adopted from October 1 this year.

It will also change the way fringe benefits are treated under income tests for family assistance and youth income support payments.

IF YOU’RE APPLYING FOR CARER ALLOWANCE …

From January next year, new claims for Carer Allowance will not be backdated up to 12 weeks.

IF YOU ARE LOOKING FOR WORK …

The Job Commitment Bonus, a payment given to long term unemployed young people to encourage them to find and keep work, will be scrapped.

A bonus of $2500 used to be given those aged between 18-30 years old if they held on to a job for more than a year, and another $4000 if they continued for a further year.

IF YOU ARE A PENSIONER …

New residents of aged care facilities who keep their own family home and rent it out, will now have that rental income included in the income test for the pension.

Measures will also be introduced to improve aged care providers by strengthening compliance powers and implementing deregulation measures.

IF YOU GET WELFARE PAYMENTS …

Some low income earners will keep their carbon tax compensation after Labor stepped in to preserve the Energy Supplement.

The government had planned to save about $1.3 billion by stopping payments for new welfare recipients, but Labor has managed to preserve it for some, including pensioners and those who are unemployed.

Those who will miss out on the supplement will be new recipients of Family Tax Benefit Part A, Family Tax Benefit Part B and the Commonwealth Seniors Health Card.

The Energy Supplement was introduced to help with higher electricity costs and other impacts of the now-axed carbon tax. The amount of the supplement varies but is about $4 a week.

Those already in the welfare system before 20 September 2016 will continue to get the payment.

Those who enter the welfare system between 20 September 2016 and 20 March 2017, will temporarily receive the compensation until 20 March 2017.

IF YOU’RE IN JAIL …

People charged with a serious offence, who had severe psychiatric conditions, were due to lose their social security payments but Labor has managed to block the cuts.

charis.chang@news.com.au

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