Budget at a glance

This Budget continues the Government's very strong economic management and this provides the flexibility to deliver responsible reductions in personal income tax and increase spending on a number of key priorities. The Australian economy remains resilient despite difficult international circumstances.

Reducing personal income tax

On 1 July 2000, the largest tax cuts ever were delivered as part of tax reform.

From 1 July 2003, Australian taxpayers will share in further personal income tax cuts worth $10.7 billion over four years.

The reduction in income tax means that taxpayers will keep a higher proportion of their earnings.

This provides improved incentives to pursue work, advancement and higher skills.

Strong defence

Increased spending on defence (including Australia's contribution to disarming Iraq) of $2.1 billion over five years from 2002-03.

Enhancing Australian security

An additional $411 million over five years from 2002-03 (building on last year's measures) to upgrade Australia's existing domestic security arrangements.

Investing in education

$1.5 billion over four years from 2003-04 growing to an extra $870 million each year to enhance our higher education system.

Health

$917 million over five years from 2002-03 for the A Fairer Medicare package.

$42 billion over five years from 2003-04 for public hospitals under the new Australian Health Care Agreements.