On Tuesday 2 April 2019, the Commonwealth Treasurer, Josh Frydenberg delivered Australia's 2019–2020 Federal Budget. This report provides KPMG's insights and analysis into the Budget's major implications for Australian business, industries and sectors.
The Federal Government has forecast a fiscal surplus for each year of the 2019-23 forward estimates period. This has given the government the scope to not only fully deploy the $9 billion in potential additional expenditure or tax cuts that it foreshadowed in last December’s mid-year economic and fiscal outlook, but to introduce further personal tax cuts on top.
With a federal election expected to be called within days, it remains to be seen how much of the Budget’s legislative and public spending agenda will come to fruition.
Our view is that the government has taken a relatively safe fiscal approach, giving rise to the expected surpluses over the period 2019 to 2023. There is a need to strike a balance (up on the high-wire of future commodity price fluctuations) between stimulating domestic economic activity and consumption, and the reduction of government debt.
The most significant tax reduction measures are:
To partly offset the above, the government has announced a number of tax integrity initiatives which will impact larger businesses and high wealth individuals in particular. These include:
The government has also announced significant infrastructure spending as a continuation of the $75 billion 10-year infrastructure plan first announced in the 2018 Budget. This includes fast rail in Victoria, the Sydney Metro and several City and Region Deals. Nationwide road projects and road safety initiatives also receive funding.
The health sector is also a recipient of significant additional funding.
KPMG’s experts unpack Budget 2019 to explore the major implications for Australia and for business. Read our indepth analysis.