According to Wayne Swan, the Budget is scheduled to return to surplus in 2012/2013. The current deficit for 2010/2011 is $49.4 billion. The forecast deficit for 2011/2012 is $22.6 billion.
The surplus is forecast for year 2012/2013 at $3.5 billion.
This from Treasurer Wayne Swan:
Returning the budget to surplus in 2012-13
Having fought off the global recession, Australia faces the opportunities and challenges that lie ahead from a position of strength.
This means the Government can return the budget to surplus in 2012-13, despite recent natural disaster, ahead of any other advanced economy.
Our strict fiscal discipline means that the budget is on track for a a surplus of $3.5 billion (0.2 per cent of GDP) in 2012-13, growing to $5.8 billion (0.3 per cent of GDP) in 2014-15.
This represents a record fiscal consolidation and has been achieved by restraining real growth in spending and making $22 billion in savings over the budget estimates.
This strict discipline means that real growth in spending averages 1 per cent a year over the forward estimates, the lowest average rate for a five-year period since the 1980s, well under the Government's own strict 2 per cent spending cap.
Building these surpluses will mean the Government is not adding to the inflation and cost of living pressures that will accompany the mining investment boom in the years ahead.
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According to the Gillard/Rudd 2011 Budget, the forecasts are for growth to increase and unemployment to decrease.
This from Treasurer Wayne Swan:
The outlook for our economy and our nation in the years ahead is very bright and Australians have good cause to be optimistic.
The economy is forecast to grow at an above-trend rate over the next two years, driven by an investment surge in the resources sector as the weight of global economic activity moves to our region.
Following 2¼ per cent growth in 2010-11, real GDP growth is forecast to increase to 4 per cent in 2011-12 and 3¾ per cent in 2012‑13.
High prices for Australia’s key commodity exports underpin a record investment pipeline in the resources sector. The mining industry is planning to invest $76 billion in 2011‑12 - around 8 times the annual level preceding the boom.
Unemployment is expected to fall further from its current level around 5 per cent to 4.5 per cent during the next two years, with half a million new jobs created.
This historic investment boom will stretch our economy's capacity over the coming years - it will test the capacity of our workforce and put added pressure on wages and prices.
The 2011-12 Budget puts in place strict spending discipline and builds surpluses in the years ahead so we do not compound these pressures on the economy.
It was right to step in and support the economy when the private sector was in retreat, and this Budget recognises that it is right to step back when private activity is gearing up. .
As part of the 2011 Gillard/Swan Budget, changes will be made to the Australian Tax System. Many of these changes were previously raised in the 2009 Henry Tax Review.
This from Treasurer Wayne Swan:
The 2011-12 Budget builds on the Gillard Government's long-term plan to strengthen the economy and make the tax system simpler and fairer for Australian businesses and the broader Australian community.
All up, the Government has now announced 12 measures since the 2010-11 Budget that deliver on reform directions identified by the Australia's Future Tax System Review (the tax review):
- Removing the unintended tax incentive for people to drive more than they need to in order to obtain a larger tax concession, by reforming the "statutory formula" method for valuing car fringe benefits (implements recommendation 9[b]);
- Improving participation incentives for spouses without children, by phasing out the Dependent Spouse Tax Offset (consistent with recommendation 6[a]);
- Better targeting tax incentives, by replacing the Entrepreneurs Tax Offset (ETO) (consistent with recommendation 6[c]);
- Improving small business tax rules, by replacing the ETO with a small business tax package that includes a $5,000 immediate deduction for motor vehicles (consistent with the intent of recommendation 29);
- Improving certainty for investors, by allowing infrastructure projects of national significance to carry forward losses with an uplift factor to maintain their value (consistent with the intent of recommendation 31);
- Increasing support for families, by increasing Family Tax Benefit Part A payments for 16 to 19 year olds (consistent with recommendation 91[a]);
- Reforming family payments, by reducing the overlap between Family Tax Benefit Part A and Youth Allowance (consistent with recommendation 98);
- Improving regulation and reducing red tape for the not-for-profit sector, by establishing the Australian Charities and Not-for-profits Commission (consistent with recommendation 41);
- Improving certainty for the not-for-profit sector, by introducing a statutory definition of ‘charity' (consistent with recommendation 41);
- Improving tax system governance, by committing to a principles-based approach to tax law design (consistent with recommendation 112);
- Allowing the Board of Taxation to initiate its own reviews of how tax policies and laws are operating (consistent with recommendation 113); and
- Establishing a new Tax System Advisory Board (consistent with recommendation 115).
As well as delivering on reform directions identified by the tax review, the 2011-12 Budget also includes a number of measures that support the integrity of the tax system. We are:
- Reducing access to income splitting by high-income earners, by removing the Low Income Tax Offset for the unearned income of minors; and
- Increasing fairness in the tax system, by improving the reporting of taxable payments made to some contractors, and taking stronger action against fraudulent ‘phoenix' activity, fraudulent tax refunds, and non-payment of tax on government payments.
We will continue to work methodically through the tax review's recommendations as we consider further ways to take full advantage of the opportunities presented by the mining boom.
The upcoming Tax Forum will provide an important opportunity for both participants and the broader Australian community to have their say about options for further reforming our tax and transfer system.
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As part of the 2011 Gillard/Swan Budget, changes have been made to the Dependent Spouse Tax Offset for stay at home spouses under 40 years of age.
This from Treasurer Wayne Swan:
he Gillard Government will phase out the tax offset for dependent spouses currently aged less than 40 to help encourage more Australians into paid employment.
This reform will mean that from 1 July 2011 taxpayers with a dependent spouse born on or after 1 July 1971 will no longer be eligible for the dependent spouse tax offset (DSTO). This means the DSTO will be gradually phased out as the population ages.
Dependent spouses with children are not affected by this measure because they are eligible for Family Tax Benefit B rather than the DSTO.
The change will also not affect taxpayers whose dependent spouse is a carer, who is an invalid or permanently unable to work; and taxpayers eligible for the zone, overseas forces or overseas civilian tax offsets.
This will encourage younger dependent spouses without children to seek paid employment. Those aged in their 20s and 30s are of prime working age and have a reasonable prospect of gaining employment, particularly given the strength of the Australian economy.
This change recognises that dependent spouses who may have been out of the paid workforce for many decades would find it more difficult to find jobs, so they will continue to be eligible for the DSTO.
The DSTO has its origins in the initial Income Tax Assessment Act 1936 at a time when a breadwinner was expected to 'maintain' a spouse even without children, and there were limited employment opportunities for women. This is no longer the case for most Australians in today's modern economy, especially with unemployment set to fall further to 4.5 per cent.
This reform to the DSTO forms part of the Government's Building Australia's Future Workforce package.
This Budget recognises that a bigger workforce is vital for the strength of our economy and the living standards of our community.
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As part of the 2011 Gillard/Swan Budget, changes have been made to the family payments, family tax benefits system.
This from Minister for Community Services, Jenny Macklin:
The Gillard Government is making important changes to the family payment system to make it fairer and simpler, and ensure its long-term sustainability.
At the same time, the Government is providing more support for low and middle income families raising children through our election commitments to increase family assistance to support teenagers in school, make advance payments more flexible and encourage parents to get health checks for their children before they start school.
Finding room for these important measures in a Budget that makes substantial savings to return to surplus in 2012-13 shows the strength of the Government’s commitment to support Australians families.
Supporting families with teenagers
The Government recognises that the cost of raising children does not fall as children get older.
That is why from 1 January next year, the maximum rate of Family Tax Benefit (FTB) Part A for 16-17 year olds in secondary school will be increased by $4,208, and for 18-19 year olds in school by $3,741 per year.
This will help families with the cost of raising older teenagers and encourage teenagers to stay in school.
The change will align the maximum FTB rate with the 13-15 year old rate and ensure assistance for families does not fall when children turn 16.
FTB Part A will only be available for families where their teenager is in full time secondary study (or the vocational equivalent).
The families of around 650,000 teenagers turning 16 over the next five years could benefit from these substantial increases, if the young person stays in school. These changes will cost $771.9 million over five years.
Family Tax Benefit will be the primary payment for dependent full-time secondary students living at home. Youth Allowance will continue to be available for those children who meet other eligibility criteria.
Aligning FTB Part A eligibility with Youth Allowance age of independence
From 1 January 2012, the Government is also lowering the maximum age of eligibility for FTB Part A from 24 to 21, recognising that young people aged 22 and over are considered independent.
This will bring FTB Part A in line with the reduction in the Youth Allowance age of independence to 22 from 1 January 2012.
Young people aged 22 and over in full-time study may be able to access Youth Allowance independent of their parents’ income, subject to means testing and academic progress rules.
Together these reforms ensure the family payment system is focused on education and participation, by supporting families while their dependant children are in study or training.
This will deliver a saving of $29.2 million over four years.
More flexible advance payments
From 1 July 2011 families will have access to more flexible advance payments of FTB Part A. This will mean families facing unexpected costs - such as the family car breaking down - will have quick and easy access to advance payments and will not have to resort to high-interest loans or credit cards.
Families will be able to advance a maximum of 7.5 per cent of their total rate of FTB Part A payment, up to $1000. For example, a family with two children under 12 will be able to receive an advance payment of up to $644.
Families will be assessed to ensure they are able to repay the advance without falling into financial hardship.
The new flexible family payment advance arrangements will cost $62.4 million over five years, including $5.1 million in 2010-11.
Healthy start for school
To improve the health and wellbeing of Australian children, families on an income support payment will need to ensure their four year old child gets a health assessment prior to starting school, before payment of the end-of-year FTB Part A supplement can be made.
Health assessments help identify any physical health issues such as hearing or sight impairment, as well as developmental conditions and delays prior to starting school, so that children start school ready to learn.
This new requirement will start on 1 July this year and will help make sure 92,000 children each year get a pre-school health assessment. It will cost $12.1 million over five years, including $4.8 million in 2010-11.
Indexation of higher income limits
To ensure the family payment system is targeted to those who need it most, the Government is building on reforms introduced in the 2009-10 Budget that better targeted the family payment system to focus on low and middle income families.
To do this, the Government will extend indexation pauses on higher income limits for a further two years until 30 June 2014 in the following areas:
- the FTB Part B primary earner income limit will remain at $150,000;
- the income limit for receiving dependency tax offsets will remain at $150,000;
- the Baby Bonus eligibility limit will remain at $75,000 family income in the six months following the birth or adoption of a child (equivalent to $150,000 a year);
- the Paid Parental Leave income limit will stay at $150,000 for the primary carer in the previous financial year before the birth of the child; and
- the higher income free area of FTB Part A will remain constant. For example, this means the income cut-out for a family with two children under 18 will be limited to around $113,000 in 2014. Each family’s income limit depends on the number and age of their children.
Pausing the amount a family can earn before they are no longer eligible for family payments is a reform that limits growth, and improves targeting of family payments to low and middle income families. These changes will help to make the family payment system sustainable for the long-term, saving $1.2 billion over the forward estimates.
Fortnightly payment rates for Family Tax Benefit and the Baby Bonus will continue to be indexed every year to meet increases in the cost of living. The rate of Parental Leave Pay is linked to the National Minimum Wage and is not affected by this change.
The FTB Part A lower income free threshold (currently $45,114) and the FTB Part B secondary earner income threshold (currently $4,745) will continue to be indexed, providing support to low and middle income households.
In addition, the annual end of year Family Tax Benefit supplements will be held at the current levels for the next three years, delivering savings of $803.2 million over five years. The current supplement amounts are $726 per child for FTB Part A and $354 per family for FTB Part B.
The Family Tax Benefit end of year supplements were introduced in 2004 to address overpayments of family payments that arise from parents incorrectly estimating their income for the year. The proportion of families with a family payment overpayment has decreased from 32 per cent in 2002-03 to eight per cent in 2007-08.
Pausing indexation on the supplements will help make family payments more sustainable.
Australia’s spending on family payments is generous by international standards. The most recent analysis shows our spending on cash family benefits was 1.76 per cent of GDP in 2007, well above the average of 1.17 per cent.
Paid paternity leave for fathers
The Paid Parental Leave scheme began on 1 January 2011, and is already helping working mothers as they take time off to care for their newborns.
When introduced, Australia’s Paid Paternity Leave will also provide additional financial assistance at a time when family income is reduced, particularly if the father would otherwise be taking unpaid leave.
To ensure it is properly implemented, the scheme will begin on 1 January 2013, instead of 1 July 2012.
This will allow more time for consultation with businesses and families, and ensure legislation can be drafted and introduced into the Parliament during 2012.
This new start date will provide a saving of $33.3 million over five years.
These measures will deliver a fairer, sustainable and targeted family support system for low and middle income Australians that encourages participation and productivity.
The 2011 Gillard/Swan Budget has included certain benefits for small business to enable better cash flow by reducing pay as you go tax instalments for one year.
This from Treasurer Wayne Swan:
The Gillard Government will provide additional cash flow benefits to millions of Australian small businesses through the tax system, recognising many are doing it tough in our patchwork economy.
The Government will reduce income tax instalments paid under Pay As You Go (PAYG) using the gross domestic product (GDP) adjustment method for one year.
This change will deliver a $700 million cash flow benefit from lower tax payments in 2011-12, mainly to small businesses.
Small businesses - which make up 96 per cent of Australian businesses - are the backbone of our economy - and deserve all the help we can provide.
PAYG instalments in 2011-12 will be set at 4 per cent above a small business's taxable income for the previous year, half the statutory rate that would otherwise have applied. This is a one-year benefit and the statutory rate will apply as normal from 2012-13.
This measure builds on the Government's tax reforms for small businesses to be introduced in 2012-13 that include:
- an immediate write-off of the first $5,000 on the purchase of any motor vehicle;
- an immediate write-off of all assets valued at under $5,000 (up from $1,000 presently) estimated to cost $1.7 billion over the forward estimates;
- a write-off of all other assets (except buildings) in a single depreciation pool at a rate of 30 per cent. Currently, small businesses allocate assets to two different depreciation pools, with two different depreciation rates (30 per cent and five per cent); and
- a reduction in the company tax rate to 29 per cent for incorporated small businesses.
The depreciation and PAYG changes will apply to all small businesses, including sole traders and businesses operating through trusts, partnerships and companies. These reforms will make tax simpler for small business, while increasing cash flows so they can reinvest and grow their businesses.
The Government is determined to help the nation's 2.7 million small businesses remain vibrant and competitive, and these measures are an important part of that commitment.
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As part of the 2011 Federal Swan Budget, changes will be made to the Fringe Benefit Tax rules for vehicles.
This from the Treasurer, Wayne Swan:
The Gillard Government will change the fringe benefit treatment of cars to remove the unintended incentive for people to drive their vehicle further than they need to, in order to obtain a larger tax concession.
Phasing out the current car fringe benefit treatment is a sensible reform from both a taxation and an environmental perspective, and implements another recommendation of the Australia's Future Tax System Review (see attachment).
Under the 'statutory formula' method, a person's car fringe benefit is determined by multiplying the relevant statutory rate by the cost of the car. Currently, the sliding scale of rates provides an increased tax concession for salary-sacrificed or employer-provided vehicles that are driven further.
The Government will replace the current rates with a single flat rate of 20 per cent that applies regardless of the distance travelled.
This measure improves the underlying cash balance by $953.9 million over the forward estimates.
This reform is a step in the right direction for Australian families, the environment and the Budget bottom line.
This reform will only apply to new vehicle contracts entered into after 7:30pm (AEST) on 10 May 2011, and will be phased in over four years.Compared to the current statutory rates, a single rate of 20 per cent will:
- increase the tax concession provided for vehicles driven less than 15,000 kilometres a year;
- maintain the current tax concession provided for vehicles driven between 15,000 and 25,000 kilometres a year; and
- decrease the tax concession provided for vehicles driven more than 25,000 kilometres a year.
People who use their vehicle for a significant amount of work-related travel will still be able to use the 'operating cost' (or 'log book') method to ensure their car fringe benefit excludes any business use of the vehicle.
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There is something very troubling about walking into an Apple store. Even walking past one and glancing inside is enough to cause shudders. Its not the fact that I'm overwhelmed by a vast store filled to the brim with about 3 different products. Its not the bright white lights, although that in itself is disturbing.
No, the real problem i have with Apple stores are its employees and their seemingly endless enthusiasm for all things Apple and all things Jobs. Steve Jobs.
What is it with their blue t-shirts? What is it with their casual know it all attitude?
These New Age Nerds are nothing more than sales assistants. On award wages. Yet they have the temerity to lord it over all and sundry just cos they wear a bright blue t-shirt uniform with their flair attachment of an IPhone.
What are they doing with that IPhone anyway? Having some quiet face time with Jobs? Apple discovered video chat on mobile phones in case you didn't know. It was around for years before them, but it took Apple to call it Face Time.
But seriously, they have a hundred different (same same) machines in the place - the workers need a IPhone around their neck for what? To learn all they can about 3 different yet seemingly the same products?
Take the Ipad 2 for instance, or the Ipad 1 - same thing really. Its just a whopping big IPhone without the ability to make calls. Although with the IPhone 4 making a call that didn't drop out proved problematic as well. So the Ipad 2 is just an Ipod touch only bigger? They make this whopping big screen and with all that extra room they include how much more storage space? None. And not even a USB port.
Sure i admit i have an IPhone. It works. Its handy. Is it different to other smart touch phones? Dunno, don't care. I'm not a slave to the technology. And I'm not a sycophant. Which is more than we can say for some other devotees.
And how is it that there are so many store employees? This is like walking into a Telstra store in days gone by - dozens of staff wandering about. Difference here is that Apple stores have customers. But what do Apple workers do all day and how can Apple turn a profit with so many staff?
According to a recent report, its easy to make profit when workers in the Apple factories are being exploited. Never a good thing when companies have to install suicide nets for overworked employees on 14+ hour days. Compare and contrast.
There's an ad for you. "I'm a blue t-shirt wearing Apple store employee - and I'm an overworked suicidal Apple factory worker from China."
Here are some photos of them worshipping to Jobs. Not all of them are wearing blue t-shirts - but you get the idea. Not much difference really.
So we have been waiting at least 10 years to capture Osama Bin Laden. He has been Number 1 on the wanted list since the 1990's.
And after all of that, shortly after being killed in Pakistan, US forces bury him at sea? This according to senior US officials, whatever that means. Surely they are joking.
The reason given apparently is that they couldn't find a country that would bury him within 24 hours as is Islamic custom.
God almightly. If true, they have just created one of the world's biggest conspiracy theories. Is he dead, is he alive, when was he really killed etc etc. Pure genius.
The story is only a few hours hold. Already there have been faked death photos of Bin Laden. Anything is possible...
According to Time "But the lingering question is why at sea? The official said that finding a country willing to accept the remains of the world's most wanted terrorist would have been difficult, so the decision was made to bury bin Laden at sea. Furthermore, one suspects that the U.S. would not have wanted there to be a physical grave site for fear of it turning into a place of worship for bin Laden's followers."
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