HOW will the 2016 Federal Budget affect you?

The Economy

— The Government expects an underlying cash deficit of $37.1 billion in 2016-17, down from an estimated $39.8 billion in 2015-16.

— Last year the government had forecast a return to surplus by 2019. But now it sees the deficit falling to $6 billion by 2019-20 and a balanced budget by 2020-21

— Inflation is forecast to grow to 2 per cent by 2016-17, up from a forecast 1.25 per cent for 2015-16 and 1.5 per cent in 2014-15.

— Net debt hits $326 billion in 2016-17 before peaking at $356.4 billion in 2018-19 and then starting to decline.

Income tax

— Upper limit for the middle income tax bracket to rise to $87,000 from $80,000 from July 1.

— Temporary deficit levy of 2 per cent on income over $180,000 from 2017.

Infrastructure

— Additional $33 billion over the forward estimates to deliver road and rail upgrades

— $594 million to Australian Rail Track Corporation for proposed Melbourne/Brisbane rail link

— $2 billion for investment in dams and pipelines nationally.

Banking

— More than $120 million will be paid to the Australian Securities and Investments Commission to battle misconduct in the financial services industry.

— The extra funding will allow increased surveillance and enforcement in areas such as financial advice, lending and life insurance.

Superannuation

— A dozen different superannuation rule changes have been announced in a reform package that will save the Government $2.88 billion over four years.

— The biggest savings come from lowering the caps on concessional super contributions — such as employer payments and salary sacrifice — to $25,000 a year.

— The amount of super that can be transferred into zero-tax retirement phase accounts will be limited to $1.6 million.

— There’s a big cut in how much non-concessional, or after-tax, contributions people can make in their lifetime, while lower-income earners will benefit from a new tax offset.

— Only 4 per cent of super fund members will be negatively affected by the changes, the government says.

Tax avoidance

— Australian Taxation Office to receive $679 million to help crack down on multinationals, private companies and high wealth individuals

— A new taskforce to raise $3.7 billion in tax between now and July 2020.

— Funding will increase the ATO’s specialist audit and investigation teams dedicated to addressing international tax risks and focusing on wealth individuals, trusts and tax scheme promoters.

Welfare

— Crackdown on welfare rorts.

Disability support pension:

— Save $62 million over five years reviewing 30,000 people receiving DPS payments every year for three years (90,000)

Rental payments:

— Streamline payments so public housing tenants have their rent payments automatically wired to landlords to minimise evictions and encourage investment in new public housing stock.

Try, test and learn fund:

— $96.1 million over four years to target people at risk of long-term welfare dependency (NZ model)

— $80 million cut from Department of Human Services.

Health

— Medicare rebates frozen at just $37 for six years forcing doctors to introduce co-payment.

— Prescription medicine prices to rise by $5 from January

— $1000 free dental care for kids axed

— $1.2 billion aged care cuts

— No reforms to private health insurance which may have cut premiums by up to $300 from next year

— New Medicare rebates for breast cancer MRIs

— $9.4 million to detect, prevent and respond to hospital superbugs and antibiotic resistance

Families

— Plans to press ahead with cuts to the paid parental leave that could leave 80,000 families up to $11,000 a year worse off by preventing them so called “double dipping” on their employer paid leave while at the same time getting government money

— Families will have to wait at least another year for new streamlined childcare support and the lifting of the child care rebate cap from $7500 to $10k which won’t be introduced now until July 2018.

Small business

— Small business tax rate will be lowered by 1 per cent to 27.5 per cent.

— Turnover threshold for small businesses increased from $2 million to $10 million giving access to tax incentives.

— From July 1 the increase to instant write-off for equipment purchases will be extended until June 30, 2017 to businesses with a turnover less than $10 million.

— Access to tax concessions increased to more than 90,000 additional small businesses.

— Unincorporated tax discount increased up to eight per cent for businesses with turnover below $5 million.

Jobs

— Youth job seekers who need to boost their job-readiness will take part in intensive pre-employment skills within five months of registering with jobactive.

— Internship program with up to 120,000 placements over four years to help young job seekers who have been employed for six months or more.

— Job seekers will receive $200 per fortnight on top of their regular income support payment while doing an internship.

— Businesses will receive an upfront payment of $1000 when they take on an intern.

— Australian employers will be eligible for a Youth Bonus wage subsidy between $6500 and $10,000 depending on young person’s job readiness.

Education

— Investment to education, training and child care will increase to more than $41.8 million in 2016-17. Early education and care will increase by 9.6 per cent to $8.6 billion, schools will rise by 8 per cent to $17.6 billion, higher education will increase by 0.9 per cent to $12.3 billion and skills up 7.7 per cent to $3.3 billion.

— The Government’s Higher Education reforms have been delayed by 12 months and university fee deregulation abandoned.

Research

— Backing co-investment in new spin-offs and start-ups created by Australian research institutions through the CSIRO

— Expansion of the CSIRO accelerator program to support public research bodies to achieve commercial success

Communications

— Commercial television and radio license fees cut by 25 per cent

— Funding levels for the ABC to remain at $3.1 billion and $814.2 million for SBS

Defence

— $686 million for continued military operations

— $29.9 billion allocated for defence as outlined in the 2016 Defence White Paper includes 12 new submarines, 9 future frigates and 12 offshore patrol vessels

Terrorism

— $195 million on increased cyber security

Foreign Affairs

— About $42.3 million will be spent on opening consulates in Lae in Papua New Guinea and China and an interim embassy in Ukraine

Tobacco

— Cigarettes up by 12.5 per cent a year for the next four years.

— The limit to the purchase of duty-free cigarettes will also be slashed in half from July 2017 — dropping from just 50 cigarettes to 25.