Higher taxes in Australia’s ‘better times’ budget
Former prime minister John Howard has slammed the latest Budget for bashing the big banks with a new tax.
A levy on the biggest banks and crackdown on multinational tax avoidance could well be out of the Greens’ playbook.
She called the tax bad and lazy policy to fill a funding hole and banks were “an easy target”.
“This is good, common-sense financial management”, Mr Morrison said.
The government will also tackle supply issues, unlocking Defence land in Maribyrnong, in Melbourne’s west, for 6000 new homes, and crack down on foreign buyers of new developments.
Big nation building projects will get an extra $75 billion over ten years, while schools will get an extra $18.6 billion, and tough new measures will be placed on the financial sector.
Treasurer Scott Morrison said it would reflect a government “living within its means” as he attempts to deliver a previously pledged surplus by 2020-21.
“Our equity colleagues estimate the impact on profitability will be 3-6 per cent. Bank stocks fell 3 per cent yesterday, reflecting reports on the possibility that such levy would be introduce”, they said.
The Treasurer believes better days are ahead, thanks to an uptick in the global economy.
Among other things, the Australian government earmarked 5.3 billion Australian dollars (3.6 billion euros, $3.9 billion) for the construction of a second worldwide airport in Sydney, slated to be ready by 2026. A 2 percent so-called Temporary Budget Repair Levy paid on incomes exceeding AU$180,000 ($133,000) over three years ends in July.
They also remain in the dark over which commercial activities will be captured by the tax.
“Don’t do it – they already don’t like you very much”, he said.
“We are pleased to see action to achieve a surplus by 2020/21, but are concerned that most of the improvement to the bottom line comes from more taxes rather than less spending”, Australian Chamber of Commerce and Industry chief executive James Pearson said.
Marie Diron, associate managing director of Moody’s Investors Service, said the agency assessed Australia’s fiscal strength as “very high, a key support to the government’s triple-A raiting and stable outlook” after the budget. There will be a drug testing trial for 5,000 new welfare recipients.
“We will no longer accept, as an excuse from repeat offenders, that the reason they could not meet their mutual obligation requirements was because they were drunk or drug-affected”, Morrison said.
There will be a crackdown on those attempting to collect multiple payments, stricter residency rules for new migrants to access Australian pensions, and denying welfare for a disability caused exclusively by their own substance abuse.
Business Council president Jennifer Westacott said it was a budget for “a reality world”.
“At a minimum the Turnbull Government must restore all health funding the Government has cut from Queensland, and ensure sufficient growth funding going forward to address the challenge of rising demand”. He would seek advice about its legality.