2017 Federal Budget: A Budget For Millionaires?

In response to the release of the 2017 Federal Budget this week, Bill Shorten says Labor will back Government plans to raise the Medicare levy, but only for the top two tax brackets.

The increase to the Medicare levy by 0.5% (from 2% to 2.5%) from July 2019 has been proposed in Scott Morrison’s Budget to pay for the National Disability Insurance Scheme (NDIS).

The Coalition’s plan will see all Australians paying the Medicare levy, but Labor only wants people earning over $87,001/year to fork out extra.

That would leave over 80% of workers free from paying the levy, according to Labor.

“Labor cannot support making people on modest incomes give up even more of their pay packet,” said Mr Shorten.

Giving millionaires & the top 2% tax cuts while everyone else gets a tax hike? Just the wrong priority. We oppose scrapping the deficit levy

— Bill Shorten (@billshortenvcuc) May 10, 2017

The main promise of the Federal Budget by Mr Morrison is one of “fairness, security, and opportunity”.

In a bid to win the political argument about “fairness”, the ALP has labelled this Budget as one for “millionaires and multinationals”, not everyday Australians.

In his Budget reply speech to the House of Representatives, Mr Shorten said a “Labor Budget would stand up for middle class and working class families”.

Prime Minister Malcolm Turnbull said in an interview with Sky News that the increase of 0.5% will be felt by many Australian families, but “there is a benefit” that it will go towards the NDIS.

“So rather than saying to parents with a disabled child, in a couple of years’ time: ‘I’m sorry, the cupboard is bare’… what we’re doing is looking all Australians in the eye and saying: ‘We all benefit from this National Disability Insurance Scheme’,” said Mr Turnbull.

He describes the levy to fund the NDIS as a “fair” and “responsible” move.

.@TurnbullMalcolm says the levy is ‘fair and consistent’ and will ‘depoliticise’ the funding of the NDIS #Budget2017 https://t.co/paRUvhNjjw pic.twitter.com/J7OpgeXskh

— Sky News Australia (@SkyNewsAust) May 12, 2017

In terms of the big bank levy introduced in the new Budget, the Labor Party says they will not oppose this, but are seriously concerned about the likelihood of the banks passing costs onto the consumer.

“If the banks pass on a single dollar of this tax to Australian families – then that should be the end of this Treasurer, this Prime Minister, and this government,” said Mr Shorten.

The Leader of the Opposition says the ALP would give the banks a “Royal Commission” and a “proper, considered examination of the results of the excessive economic power of banks” would be considered to determine how to respond.

Mr Turnbull has routinely argued against the idea of a Royal Commission into the banks, saying it is a “waste of money”.

“My objection to it was that it would take years, cost hundreds of millions of dollars, half a billion dollars or something of that order, and it would make a bunch of recommendations which you could write now.

“Because we know what the problems are,” said the Prime Minister.

In his speech, Mr Shorten made other announcements such as a promise that the ALP will block the First Home Super Saver Scheme, because it will undermine Australia’s superannuation system and does not seriously address the “crisis in housing affordability”.

His plan for increasing housing affordability is to:

• Drive construction of 55,000 new homes over 3 years
• Create 25,000 new jobs per year
• Commit to more public housing, which would include providing for children and women escaping family violence

The ALP also says they will commit an extra $22 billion to school funding that has been cut by the Coalition, saying although the Prime Minister talks about Australian innovation, “we can’t be an innovation nation unless we are an education nation”.

Mr Shorten’s announcements also included a promise to block university cuts and the increases to student fees, close multinational tax loopholes, and reverse cuts to TAFE apprenticeships.