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2014 Australian federal budget
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2014 Australian federal budget
Australian Coat of Arms.png
Submitted 13 May 2014
Submitted by Abbott Government
Submitted to House of Representatives
Party Liberal/National Coalition
Treasurer Joe Hockey
Total revenue $385.8 billion
Total expenditures $412.5 billion
Deficit $29.8 billion
‡Numbers in italics are projections.
The 2014 Australian federal budget is the current federal budget to fund government services and operations for the 2014/15 financial year. The 2014 budget was the first delivered by the Abbott Government, since the Coalition's victory in the 2013 Australian federal election. Treasurer Joe Hockey presented the budget to the House of Representatives on 13 May 2014.
The budget features significant structural reform to redress a growing deficit. This includes a dramatic downsizing of government bureaucracy. It also contained significant changes to welfare, new initiatives for a medical research fund and spending on roads. A budget surplus was not expected until 2023.
The austere budget faced widespread criticism and was overwhelmingly rejected by the Australian public as reflected in several opinion polls after its release. Opposition to "unfair" budget measures came from the opposition and cross-bench, pensioners, economists, the union movement, students and welfare, community and disability groups with some taking to the streets in protest. The budget included several changes which were contrary to pre-election commitments or promises made by members of the Abbott Government, including a 1% cut in funding to the ABC and SBS. Opposition in the Parliament of Australia has resulted in no savings being forecast in its first year.
1 National Commission of Audit
4.1 General government
4.2 Social security and welfare
4.3 Infrastructure, transport and energy
4.7 Community services and culture
5 Opposition and crossbench response
6 Critical reception
7 See also
9 External links
National Commission of Audit
The Abbott Government commissioned a National Commission of Audit in October 2013 to recommend measures to reduce government spending. The Commission made 86 recommendations, including a slowing of increases in the age pension, an increase in the retirement age to 70 by 2035 and the inclusion of the family home in new means testing from 2027. These Commission's recommendations were adopted in the budget. Other controversial recommendations include copayments of Medicare bulk billing, besides other.
Before the budget's release Treasurer Joe Hockey signaled the budget would contain widespread spending cuts in response to what he described as an unsustainable growth in government expenditure.
In August 2013, in a budget update before the forthcoming federal election, the Australian Treasurer under the Second Rudd Government forecast a $30.1 billion deficit for 2013/14. In December 2013, the Australian Treasurer under the Abbott Government forecast a $47 billion deficit for the same period, due to the new government's decision not to implement savings and revenue measures put forward by the Rudd Government before the election, and an unexpected injection of $8 billion into the Reserve Bank. The four-year forward estimates project a difference of $68 billion. More than half of that difference has been attributed to lower government revenue from taxation. A surplus was projected for 2023/24.
The budget forecast a deficit for 2014/15 of $29.8 billion.
The budget introduced a "deficit levy" of 2% on higher income earners, payable on incomes over $180,000, which was expected to apply for one year and raise around $2.5 billion. Legislation to impose the levy was assented to on 25 June 2014. The levy, called the Temporary Budget Repair Levy, commenced on 1 July 2014 and will apply for three years.
The corporate tax rate will decrease by 1.5% from 1 July 2015 to 28.5%.
The National Commission of Audit recommended that the Family Tax Benefit Part B be abolished. It will now be means tested to a new threshold of $100,000. Families will cease being eligible for the payment when their youngest child turns six.
The indexation of the federal fuel excise was reintroduced. The adjustment will be made twice a year and is expected to raise $3.7 billion in its first four years. Indexation had been abandoned in 2001. The change took effect on 10 November 2014, increasing the base rate to 38.6 from 38.14¢ per litre.
See also: Fuel taxes in Australia
In April 2014, Joe Hockey made it clear the budget would see a significant tightening of federal government expenditure which would be felt by all sectors of the community. More than three quarters of the savings in the 2014 budget were the result of cuts to government spending.
A number of federal government services and approvals will increase in price and new fees will apply including some provided by Austrade and Geoscience Australia. Funding for foreign aid is being frozen leading to a saving of $7.6 billion over five years.
Federal politicians and public servants will have their salary frozen for one year. Post retirement benefits for federal politicians are being reigned in. This includes limitations on travel expenses, staffing arrangements and working entitlements. 3,000 positions within the Australian Tax Office will be lost with thousands of staff retrenched from other major federal departments. The Australian Workforce and Productivity Agency and the Australian Water Commission are to be abolished. 76 government agencies will be abolished a small number merged or privatised. These cutbacks are expected to save $500 million over four years. The budget for the CSIRO was reduced by $146.8 million over four years.
Social security and welfare
"The age of entitlement is over."
Speech by federal Treasurer Joe Hockey 
The Newstart Allowance for those seeking work will not be available to people under the age of 25. The unemployed under the age of 30 would not qualify for any payment for six months, after which the Work for the Dole program would be required. If after another six months there is no employment, the six-month cycle of off/on payment starts again. The Schoolkids bonus is to be abolished. A Paid Parental Leave scheme is being introduced. The Seniors Health Card will not be eligible to retired couples with more than $1.4 million in assets. The indexation for pensions will be lowered from 2017 onwards, after it is linked to inflation rather than male average earnings. New funding for the National Rental Affordability Scheme (NRAS) ceased on 1 July 2014 with funding for tenanted NRAS properties continuing. The First Home Saver Accounts scheme will be abolished leading to savings of $134.3 million.
Infrastructure, transport and energy
The budget allocated significant funding for road infrastructure in western Sydney, including for the WestConnex motorway and for roads to Badgerys Creek Airport  as well as significant funding for Melbourne's East West Link. There was also funding for two major road projects in South East Queensland – the final section of the upgrade of the Ipswich Motorway and the Toowoomba Second Range Crossing
The budget slashed government support for renewable energy and climate change-related programs.
Over the next four years $4.7 billion of funding will be stripped from higher education. On average the Commonwealth's contribution to the funding of university degrees is being cut by 20%. From 2016 the interest rate charged on HECS debts, which is currently linked to the consumer price index will be charged at the same rate as government long-term borrowings. HECS debts will now have to be repaid once an individuals income reaches $50,638. Universities will be able to set their own price for courses under a new deregulated fee system. Modelling conducted by Universities Australia indicates the fee to study at an Australian university will on average double in cost.
$245.3 million is being spent on continuing the school chaplaincy program.
See also: Tertiary education fees in Australia
Before the budget was released the Abbott Government announced Australia's biggest ever military purchase of 58 Lockheed Martin F-35 Lightning II which are to be delivered in 2018.
A controversial $7 co-payment to see a bulk billing doctor, receive x-rays and get a blood test is planned to save $3.4 billion over five years, however $5 of it will go toward medical research. All 61 Medicare Locals—organisations established to plan and fund extra health services—are going to close.
Community services and culture
Funding for the ABC and SBS is being cut by 1% leading to costs savings of $43.5 million. This is despite repeated comments by the Abbott Government that funding to the ABC would not be cut. The ABC's contract to operate the Australia Network was cancelled after its first year of a 10-year contract. The Australia Council for the Arts had its funding cut by around $30 million. Screen Australia is losing $38 million over four years.
More than 150 programs, grants and activities designed to assist Indigenous Australians are being replaced by five broad-based programs with cuts to funding of $534 million aimed at reducing duplication and waste. The next three years of funding to the National Congress of