Statement 1: Budget overview
The 2015‑16 Budget is focused on building jobs, growth and opportunity and providing a credible path back to surplus. It is about building on our strong foundations and taking the next steps to set Australia up for a more prosperous future.
The Australian economy is set to strengthen over coming years, as we transition from a mining investment led boom and non-mining sectors step up to drive growth. The global economic outlook is strengthening, and households and businesses are already benefiting from historically low interest rates, a lower exchange rate, and lower petrol and electricity prices.
The Government's historic free trade agreements will help unlock new trade opportunities throughout the region. Australia's biggest-ever infrastructure programme is also being rolled out across the country to improve connectivity and the productive capacity of the economy.
The $5.5 billion Jobs and Small Business Package will provide major incentives for businesses to invest, hire and grow. From Budget night until 30 June 2017, small businesses will be able to immediately deduct each and every asset valued under $20,000. In addition, from 1 July 2015, all small businesses — whether they are incorporated or not — will receive a tax cut. The package includes $375 million aimed particularly at improving opportunities for Australians to get a job and reaching out to disengaged youth.
The $4.4 billion Families Package delivers major structural reform of the child care system to make it simpler, more affordable, accessible and flexible. Better child care will make life easier for families and support parents to get jobs and stay in work.
The Budget also contains a number of measures that will improve the fairness of tax rules and benefit systems. Further strong action will be taken to ensure that companies who earn profits in Australia pay tax in Australia.
The Budget also includes $1.2 billion in new funding for defence, national security and law enforcement to keep Australians safe and secure.
The Government remains committed to returning the budget to surplus as soon as possible. Despite iron ore prices nearly halving since the last Budget and a write‑down of $52 billion in tax receipts, the budget position is projected to improve each and every year over the forward estimates. The deficit will narrow from $35.1 billion (2.1 per cent of GDP) in 2015‑16 to $6.9 billion in 2018-19 (0.4 per cent of GDP).
More work is required to improve the budget position over the medium term, but the 2015‑16 Budget is responsible, measured and fair; and a budget for the current circumstances Australia faces.