This year’s budget focuses on boosting infrastructure, improving housing affordability and rolling back unpopular measures such as the previously proposed university fee deregulation.

Much of the budget news had been ‘leaked’ slowly over the last two weeks so there wasn’t much that was new. However, the levy on the big five banks, the big infrastructure spend, and the increase in the Medicare Levy to fund the NDIS were surprise additions.

As an advocate on education issues, ASG believes education is a fundamental right and a necessary plank of nation building, and needs to remain affordable and equitable. 

We welcome the new offer of funding to states and territories under a needs based approach and the step away from university fee deregulation. However, we remain concerned at the increasing cost burden on students and parents in the tertiary education sector and the potential disincentive this may provide in many students accessing further learning. We urge the government to consider education policies holistically and invest in improving student outcomes and engagement at all levels of the education journey.

ASG chief executive officer, John Velegrinis says: 

“We look forward to seeing the federal and state governments working together to achieve equitable education funding. Without a truly bipartisan approach our educational decline against international competitors will accelerate. Equally, government and policy makers must work more closely with educators and most importantly with parents to ensure that we are truly developing the best educational environment for Australians.”

Here are some reactions from an ASG member and an ASG student.

ASG member Lina Cucinotta and mother of a 17 year old son and 14 year old daughter says: 

 “I don’t think my kids will ever have it as easy as we did with higher uni fees and dipping into their super. I feel as though this budget is setting them up to be at home for longer. 

“Next year I won’t have the extra school fees for Samuel because he would have finished high school, but where perhaps 15 years ago I might have thought once Samuel finishes year 12 I’ll be able to stop working, I think I’ll have to continue working. I don’t think they can move out while they’re at uni. Even if he works at the local supermarket he is going to be paying off his HECS debt a lot sooner, so I think it puts pressure on me to continue working and I don’t think we’re in a position where we’re going to be able to retire earlier because the kids will still be at home. It will be an added burden on us, I don’t think they’ll leave until they perhaps are married.” 

Mikayla Grant, an ASG student is in her fourth year of a Bachelor of Nursing/Bachelor of Paramedicine at the Australian Catholic University in Brisbane says:

“It’s definitely a bit concerning since most of us after we graduate will be going into entry level positions and will potentially have to start paying off our HECS straight away. It’s concerning because we’re just starting out in the world and probably starting to move out of home so it’s going to be a shock to the system I think. 

“At uni, everyone is kind of in disbelief about it. The government always seem to be looking for more money somehow and they’re always encouraging people to go to uni and get higher education and yet they’re making it harder for people to go to uni or to be able to pay for their studies.” 


Contact ASG on 131 ASG (131 274) if you have any questions about your membership.

The 2017 federal budget at a glance



Economy
• Growth in the Australian economy is expected to rebound to 2.75 percent in 2017-18 and 3 percent in 2018-19.
• Deficit of $29.4 billion in 2017/18 but projected surplus of $7.4 billion in 2020-21
• Increased Medicare levy adding $8.2 billion to the bottom line for three years 
• Wage growth expected to increase from 2 per cent to more than 3 per cent over the next four years.

Housing
• First home buyers can salary sacrifice for deposit from pre-tax pay 
• Retirees who sell family home can add non-concessional $300k into super 
• Community housing associations can borrow money at lower rates of interest 
• Increase capital gains discount by 60 per cent for investments in affordable housing
• $1 billion to fund deals within cities to develop urban areas

Business

• $6.19 billion levy on the biggest five banks
• Establishment of the Australian Financial Complaints Authority, to handle all consumer disputes with banks and other financial institutions.
• Banks subject to bigger fines of $50 million - $200 million for serious misconduct.
• $75 billion in infrastructure funding and financing over the next ten years.

Education
• Extra $2.2b over four years for schools and $18.6 billion extra funding for schools over the next ten years. 
• Reintroduction of Gonski style needs based funding formula.
• HECS debt threshold lowered to $42000.
• University students face 7.5 per cent tuition hike.
• Universities hit with 2.5 per cent ($2.9 billion) efficiency dividend over two years.
• Australian permanent residents and most New Zealand citizens will no longer be able to apply for Commonwealth supported university places.
• $15.2 million for regional study hubs to improve university access.
• Early learning and child care will receive a $2.5 billion funding boost.
 
Health
• $8.2 billion from increasing the Medicare levy on all taxpayers from 2 percent to 2.5 percent, starting on 1 July 2019. This increase is expected to help fund the National Disability Insurance Scheme.
• The cost of visiting the doctor will drop as a freeze on Medicare rebates is lifted. 
• Cost of some medicines will be going down and extra medicines for chronic heart conditions and schizophrenia have been added to the Pharmaceutical Benefits Scheme worth $510 billion. 
• $115 million for mental health research and suicide prevention and people living in rural areas will have access to tele-health psychological services. 
• $65.9 million will go towards children’s cancer research this year. 


 

The 2017 Federal budget in more detail



Economy

The Australian economy is expected to grow to 2.75 percent in 2017-18 and 3 percent in 2018-19 mainly due to anticipated growth in household consumption and non-mining business investment. 
The government also expects that a strong global economy and ongoing improvements in Australia’s economic performance will deliver a deficit of $29.4 billion in 2017-18.

The government announced a 10 year nation building program spend of $75 billion. This is set to create tens of thousands of jobs to stem the slowdown of apartment construction and the end of a mining boom. This will see an injection of $5.3 billion into a new company to build and operate a new airport for Western Sydney by 2026. The nation's second and third largest cities, Melbourne and Brisbane, will be connected by a new 1700 kilometre inland rail line.

Business


Australia’s five biggest banks will have a new levy on liabilities imposed on them. The levy is expected to raise $6.2 billion over four years. It is likely that there will be flow on effects on bank customers.

From July 1, ANZ Bank, Westpac, National Australia Bank, Commonwealth Bank and Macquarie will face a 6 basis-point levy on customer deposits above $250000, corporate bonds, commercial paper, certificates of deposit and Tier 2 capital instruments. 

The government also announced the introduction of a new body, the Australian Financial Complaints Authority, which will be tasked with resolving disputes, with banks facing fines of as much as $200 million for misconduct.

The budget also announced a $1.2 billion from a levy on companies employing foreign skilled workers employed under a new temporary skill shortage visa. Employers will be charged between $1200 and $1800 per worker employed under this visa scheme. It is anticipated this levy will contribute to $1.2 billion within the Skilling Australians Fund.

Housing


The budget introduced a new scheme aimed to help first time home buyers get a foot on the property ladder. 

The scheme will allow first time home buyers to salary sacrifice up to $30,000 into their superannuation in addition to their compulsory contributions from July 1. This means money put into their super will be taxed at 15 per cent instead of marginal rates.

The government is also giving older people tax breaks if they downsize and funnel proceeds into their pension funds. This move is anticipated to unlock housing stock.

Those aged over 65 can take up to $300000 from the proceeds of selling their home and downsizing to a smaller one, and put it into their superannuation fund. However, this could have implications for their pension payments.

Education


Education measures were released in several pre-budget announcements. In summary, university students will pay more for their education and repay sooner, while schools will receive an extra $18.6 billion over the next decade, including more than $2.2 billion in this budget for the first four years. 
Student contributions will increase by 1.8 per cent each year between 2018 and 2021 for a total 7.5 per cent increase. This means they will pay 46 per cent, instead of 42 per cent, of the cost of their degree on average. So, for a four-year course, this is an increase in total student fees of between $2000 and $3600. 

Changes to HELP will also see a reduction in the first income threshold of payment from the current level of about $55000 a year to a new and much lower level of $42000 a year. Although, the new repayment rate will start at 1% compared to the current starting repayment rate of 4 per cent.

Universities will also be hit with a cut of $384.2 million over two years. This means universities will have to do more with less.

The budget also included a $24 million for 1200 scholarships to help rural students study maths and science. This is meant to support skills development and educational attainment. There is an additional $15.2 million for regional study hubs to improve university access. 

The surprise reintroduction of a Gonski style needs based funding formula will see 24 non-government schools losing funding, and some 353 presently over funded schools which will be worse off.

The government also said that David Gonski will conduct a review that will recommend “the most effective teaching and learning strategies to reverse declining results, and seek to raise the performance of schools and students”.

Early learning and child care will receive a $2.5 billion funding boost, including the new system of fee subsidies, and $428 million will go towards a one year extension to the program guaranteeing 15 hours a week of preschool for four year-olds. 

The government has also promised $37.3 billion in child care for around one million Australian families, including before and after school care.

The Government will also provide $428 million to extend the National Partnership Agreement on Universal Access to Early Childhood.

Health

The government expects to spend $1 billion more on health in the next financial year compared to the current financial year with the NDIS to be fully rolled out by 2020. 

The NDIS is budgeted to cost $22 billion of which $9.1 billion will be sourced from the increase in Medicare Levy on taxpayers, which starts on 1 July 2019. 
 
The Medicare Rebate freeze will be gradually lifted starting with GP bulk billing and then specialist visits, diagnostic imaging and pathology services. Lifting the freeze from the start of July will mean that patients are more likely to be bulk billed when they visit GPs and specialists.

The budget also announced investment in mental health, in particular access to telehealth and telemedicine for psychology services. Patients with severe eating disorders will be eligible for part of a new $80 million fund for people with severe mental illnesses.
Join ASG today

OR

Face to face

Book a one-on-one meeting
with an ASG representative.

Call me back

Request a call back from
an ASG representative.