Federal Budget, simplified

We’re spending more than we’re earning.

Oops.

That’s never a good thing. Imagine the Australian Government applying for a cash advance…

The budget and I got pretty cosy on the weekend. We had some good times, and some bad. I managed to translate it to a language we can all understand and reduce it to a length that won’t require a toilet break half-way through.

Is the GFC a BFG?

No. The Global Financial Crisis is no Big Friendly Giant. The GFC has left its mark on the Australian economy and, along with recent natural disasters, is hurting our bottom line. This is why the 2011/2012 budget was expected to be such a tough one.

What’s a multi-speed or patchwork economy?

This is where some parts of the economy are growing and others are facing challenges. For example, our mining industry is experiencing boom while the agricultural industry is struggling.

The budget winners – who will benefit?

1. “Building Australia’s Future Workforce”
   You will see more emphasis on vocational education and training and a particular focus on supporting apprentices, increase skilled migration and getting the unemployed into jobs. There will also be more support for teachers. This is all to provide a higher value education service.
2. Small Businesses
   Point #1 will help small businesses find skilled employees more easily. Reduced PAYG instalments will take pressure off SMEs (small & medium sized enterprises) – creating more cash flow.
3. Regional Australia
   More money for regional areas; hospitals, healthcare, roads and universities. Also create jobs for skilled migrants in regional areas.
4. Health
   Mental health will receive a increased funding, especially suicide prevention.

The budget losers – who will suffer?

1. Defence
   1,000 jobs will be lost and a 3.3 billion cut to funding.
2. Not-for-profit
   Reduction in tax concessions plus more regulation.

Bizarre conversation starters…

1. The set-top box
The Government is giving pensioners $350 to upgrade to a digital television. Some people think this is ridiculous – it will absorb $350 million of the Federal Budget. Then Mr. Harvey from Harvey Norman said he could provide it for half of the proposed cost.
2. Asylum seeker situation
Under an agreement being finalised with Malaysia, Australia will send 800 boat arrivals for processing in Malaysia, accepting 4000 processed asylum seekers in return. Bizarre deal?

Questions you can ask to look smart…

1. So will the fringe benefits tax on cars affect you?
One of the methods used to calculate the fringe benefit was through the amount of kilometers you drive. This encouraged people to just go and drive lots of kilometers to try and get their kilometers up to get a greater deduction on their company car. This doesn’t really make sense from an environmental perspective so they’ve removed that incentive and replaced it with a $5000 tax deduction for business when they purchase a vehicle.
2. What are your thoughts on the Federal Budget?

Happy Fiscal Year!