News: 9th May 2006: Budget at a Glance

Fiscal Outlook

The 2006-07 Budget provides for an underlying cash surplus of $10.8 billion, the Government's ninth surplus.
Ten years of sound economic management has seen debt eliminated in net terms providing on-going interest savings of $8 billion a year which can be invested in physical and intellectual infrastructure.

Economic Outlook

Prospects for the Australian economy remain sound with economic growth forecast to be 3 per cent in 2006-07.
Business investment is set to grow strongly over 2006-07 and export growth is expected to pick up.

Personal tax cuts

The budget will provide taxpayers with personal tax cuts worth $36.7 billion over four years from 1 July 2006.
The 30 per cent threshold will rise to $25,001.
The 42 per cent marginal tax rate will be cut to 40 per cent and the threshold will rise to $75,001.
The 47 per cent marginal tax rate will be cut to 45 per cent and the threshold will rise to $150,001.
The low income tax offset will increase to $600 per year and phase out from $25,000, up from $21,600.
The fringe benefits tax rate will be cut to 46.5 per cent.

A plan to simplify and streamline superannuation

The plan includes proposals to dramatically simplify and streamline superannuation:
Tax free superannuation benefits for people aged 60 and over which are paid from a taxed fund from 1 July 2007.
Abolishing reasonable benefit limits (RBLs).
Streamlining the contribution and payment rules.
Reducing the pension assets test taper rate from $3.00 to $1.50 for every $1,000 of assets from 20 September 2007.

Enhancing opportunities and incentives for business

$3.7 billion over four years to lift the diminishing value rate for depreciation from 150 to 200 per cent for newly acquired eligible assets, supporting the take-up of new technology.
Taxes on small business will be cut by $435 million over four years to reduce compliance costs for small business and increase access to small business tax relief arrangements and CGT concessions.

Supporting families, older Australians and carers

Eligibility for the maximum rate of Family Tax Benefit Part A is being extended to families with an annual income of up to $40,000 (currently $33,361) from 1 July 2006.
The Large Family Supplement of $248 a year will be extended to eligible families with 3 children from 1 July 2006.
A one-off payment of $102.80 will be provided by 30 June 2006 to each household eligible for the Utilities Allowance and to each self-funded retiree eligible for the Seniors Concession Allowance.
Eligibility for the Utilities Allowance and the one-off payment is being extended to Mature Age Allowance, Partner Allowance and Widow Allowance recipients.
A $1,000 one-off payment will be made to recipients of the Carer Payment and a $600 one-off payment will be made to recipients of the Carer Allowance by 30 June 2006.

Furthering the health and medical research effort

Strengthening defence and national security

$10.7 billion between 2011-12 and 2015-16, providing a firm basis for continued long-term Australian Defence Force planning and enhanced capabilities.
$2.2 billion to acquire new C-17 aircraft to enhance significantly the Australian Defence Force's airlift capability.
$1.5 billion to increase the Army's size and enhance the Army's operational readiness.
$1.5 billion to 2009-10 to strengthen intelligence services, airport and air transport security, and regional cooperation.

Investing in road, rail and water infrastructure

$2.3 billion in road and rail infrastructure funding including to upgrade earlier key sections of the Hume ($800 million), Bruce ($220 million) and Pacific ($160 million) highways.
$561 million for upgrades to other major highways.
$308 million for the Roads to Recovery programme.
$270 million to improve rail track quality on the North-South rail corridor.
$500 million for improved water management in the Murray-Darling Basin.

Investing in health and improved service delivery

A major funding boost to the mental health system, committing an extra $1.9 billion over five years, including $538 million to improve access to GPs, psychiatrists and psychologists under Medicare.

For more information, please refer to http://www.budget.gov.au