Budget 2014: what you need to know
Joe Hockey's Budget gave us much of what we already knew and some surprises too, reports Callum Denness. Video: smh.com.au
Illawarra residents will have to adjust to wide-ranging new taxes, medical levies and huge structural changes to pensions, unemployment benefits and the higher education system, after the Abbott government’s first budget was handed down on Tuesday night.
But, despite the delivery of an $11.6 billion infrastructure growth package, the region did not rate a mention once in the budget papers.
In his budget night speech, Treasurer Joe Hockey urged all Australians to do their bit for the country, outlining a plan to improve the budget’s bottom line.
At the top end of town, citizens earning more than $180,000 a year will pay a temporary 2 per cent income tax levy, which Mr Hockey said “was only fair” to ensure everyone was contributing to “build a more prosperous nation”.
Illawarra commuters who drive long distances to work in Sydney and other regions will also feel the budget in their hip pocket, as the government announced it would reintroduce twice-yearly fuel excise indexation to raise $2.2 billion for building new roads.
Thousands of future students at the University of Wollongong will be affected by sweeping changes to the higher education sector, which will require them to pay back student loans sooner and at a higher interest rate.
From 2016, students will be required to start making contributions to their higher education loan when they earn $50,638, instead of the current $51,309 threshold. The university will also need to adapt to a deregulated higher education market which will allow universities to set their own tuition fees.
Major changes to the country’s unemployment benefits programs are likely to hit the Illawarra particularly hard, with the latest figures from the Brotherhood of St Laurence showing the region has the second highest youth unemployment rate in NSW.
Under the government’s overhaul which will come in from January 2015, young unemployed people could face a wait of up to six months before they can access benefits. Under 30s receiving Newstart payments will be required to do at least 25 hours a week of “work for the dole” and will only receive six months of income support before they are kicked off welfare.
As expected, all Illawarra residents aged under 47 will need to work longer, as the government confirmed plans to change the pension age to 70 from 2035. This will be accompanied by a program to encourage employment of those over 50s, with $10,000 over two years to be paid to businesses which hire mature-aged workers.
Also as predicted, from July 2015 the Illawarra’s bulk-billed patients will be required to pay $7 a visit towards the cost of GP and other consultations. Those with concession cards and children under 16 will only pay the fee for the first 10 services in a calendar year.
According to 2011 figures from the Illawarra Shoalhaven Medicare Local, which show there were more than 540 GP attendances per 100 people in the region, this $7 charge will cost residents more than $14.5 million a year.
These payments, as well as money from extra charges on some medicines and savings from the temporary capping of health rebates will go towards raising a $20 billion Medical Research Future Fund.
The good news for the Illawarra is that it could stand to benefit from the establishment of a $1 billion Stronger Regions Fund, which would be delivered in $200 million lots over five years from July 2015.
Under the national program, councils and community groups would be able to apply for a share of the cash, which would be handed out to fund “local capital works projects in areas of particular economic stress and community need”.
The Illawarra could also benefit from an extra $200million for Black Spot roads funding, and an extra $350 million Road to Recovery program – but, again, the exact areas this money will fund remains uncertain.