KPMG's detailed analysis of the key decisions and business implications of the 2017 Federal Budget.
This year, the government seeks to provide a fair and responsible plan to balance the Budget by 2020-21. Assisted by upgrades in global and domestic growth forecasts, coupled with new revenue measures, the government predicts a modest surplus in the underlying cash balance of $7.4 billion in 2020-21. However, despite encouraging signs in the global economy, important risks remain.
The government’s net operating balance provides greater transparency in budget reporting. It distinguishes between capital and recurrent expenditure by reporting the net operating balance alongside the underlying cash balance.
Major bank levy: Major banks hit with a bank levy applying at an annualised rate of 0.06 percent of liabilities, anti-hybrid integrity measures for additional tier 1 regulatory capital and a number of measures to increase banking competition and strengthen accountability.
Infrastructure: Commitment of $75 billion in infrastructure and financing from 2017-18 to 2026-27 for critical airport, road and rail infrastructure.
Housing affordability: Housing affordability package contains a number of measures, with a focus on first home buyers and increasing affordable housing stock for low to moderate income tenants, at the expense of foreign investors and investment property owners.
Personal taxes: An increase in Medicare levy from 2 percent to 2.5 percent from 1 July 2019 to fund the National Disability Insurance Scheme.
Business taxes: Besides the bank measures, and a 1-year extension of small business accelerated write-offs, there is very little in the Budget for corporates.
Visit our Federal Budget YouTube channel to watch KPMG and business leaders share insights on the Budget’s major implications for Australian business, industries and sectors.