Last night (12 May 2015) the Treasurer, Mr Joe Hockey handed down the 2015-16 Federal Budget, the second for the Abbott Coalition Government.
The cash budget deficit is estimated to be $35.1bn for 2015-16, representing around 2.1% of estimated GDP. The budget position over the forward estimates is as follows:
Real GDP growth is predicted to be 2.75% in 2015-16 (down from the 3% estimated last May) and then increasing to 3.25% in 2016-17. The unemployment rate is forecast to increase from 6.25% to 6.5%. The CPI is estimated to increase in 2015-16 to 2.5%, from the 1.75% estimated for 2014-15.
Mr Hockey described this Budget as being ‘responsible, measured and fair’ where every new spending measure is ‘being paid for by prudent savings in other areas’.
As compared to last May’s budget, where Mr Hockey asked all Australians to contribute to repairing the budget position; this year he is calling on Multinationals and others to pay their ‘fair share’ of tax while assisting small businesses to the tune of $5.5bn (mainly in the form of $5bn of tax relief via both tax cuts and expanded accelerated depreciation) and supporting Australian families with $4.4bn of funding (with $3.5bn being from a reform to child care).
The estimated reduction of Federal Government debt over the decade to 2024-25 has been scaled back to, what some might say, is a more reasonable target of $110bn.
The Budget was light on tax reform measures, not surprisingly given the tax reform White Paper process announced in late March.