Surprise tax increases in 2017 Australian budget

Rather than, as had been expected, announcing a plan to allow first-home buyers to dip into their existing superannuation funds, Morrison said the government would introduce a policy to allow people to save an additional up to $30,000 or $15,000 per year into their super fund to go towards a home deposit.

But Prime Minister Malcolm Turnbull may struggle to win the support of right-leaning members of his own party, who favour spending cuts and debt reduction.

But the scale of that borrowing immediately rose today when Mr Morrison issued a directive boosting loans from the $500 million ceiling set by predecessor Joe Hockey to a new high of $600 million.

For 2017/18 the deficit comes in at $29.4 billion, and $21.4 billion the following year, before making a remarkable step-down to just $2.5 billion in 2019/20 and then posting the first surplus in 13 years at $7.4 billion in 2020/21.

The budget has hit the big banks with a $6.2 billion tax, which UBS analyst Jonathan Mott said could be passed on to customers.

The Treasurer said there were signs of an improving global economy and "there is clearly the potential for better days ahead".

Treasurer Scott Morrison said the lenders could afford to pay, and the cash would help with budget fix and a raft of spending on infrastructure, health and schools.

The biggest loser from Tuesday's budget was the nation's banking sector, which has already been subjected to a series of scandals and parliamentiary inquiries in recent months.

'It is designed in a way to ensure that the banks do not have to pass it on to their customers, it specifically excludes from its base day-to-day bank accounts and day-to-day mortgage accounts, ' he said on Wednesday night.

"The only people paying more tax from July 1 this year are the banks and multi-nationals", Mr Morrison said, in a line that could have come directly from the ALP play book.

But while industry super funds are great proponents of long-term, nation-building projects, they very much "look forward to working with the government to explore opportunities for future investment", Whiteley commented.

Banks will face a new tax that is expected to recoup $6.2 billion over the forward estimates and help to fix the budget.

The Government will launch a "one-stop shop" where Australians can take their complaints about the financial sector called the Australian Financial Complaints Authority. A hostile Senate blocked several key planks of that budget.

The federal government still anticipates meeting its slated return to surplus in 20210-21, despite the projected deficit for this year rising slightly.

Businesses with a turnover of up to $50 million will receive a company tax cut and the $20,000 asset write-off has been extended for a second year.

"There are no silver bullets to make housing more affordable", Mr Morrison said.

An inland rail linking Melbourne and Brisbane will get an $8.4 billion, with the project set to begin in the next financial year.

The government also plans to increase taxes and charges.

  • Zachary Reyes