2008 Australian federal budget
Encyclopedia
The 2008 to 2009 budget
was released on 13 May 2008, with a particular emphasis on family welfare (expansive tax cuts and a lift in the threshold of the Medicare
levy surcharge) and capital investment (national accreditation) funds, the Federal Treasurer Wayne Swan
selling it to the House of Representatives
as "a A$55 billion Working Families Support Package" that "strengthens Australia's economic foundations, and delivers for working families under pressure" from increasingly high interest rate
s. Total spending was cut, following on from gradual cuts of nearly 2% of GDP over the decade of the Howard government. Changes to taxation prompted then Shadow Treasurer Malcolm Turnbull
to claim the increased taxation will contribute to inflation, but Swan argued that the tax will affect only high income-earners, dispelling any "custodian" line of attack. Heavy spending by the states had been inefficient at managing past underinvestment on infrastructure, and "the conduct of expansionary monetary policies will be less complicated" as a result of the new reform agenda to avoid (supply-side) case-mix funding of the health care and vocational training sectors of the economy.
A new $3 billion tax increase on alcopop
drinks was designed to slow down a projected increase (from the Federal Health Minister, Nicola Roxon
, tabling Treasury
advice) in alcopop sales by 43 million bottles, curtailing binge drinking
. However, the opposition described the increase as merely a revenue
raiser, with Shadow Health Minister
Joe Hockey
arguing that consumers of alcopop will switch to other drinks, such as champagne, and binge drinking will not decrease. In response, the Prime Minister
told Federal Parliament that the tax increase had wide support in medical and alcohol support services. Opposition Leader Brendan Nelson
counter-offered with a $1.8 billion petrol tax cut
, reversing years of policy opposing lowering petrol taxes
. The Opposition pledged to block the alcopop tax in the Senate
, which it will control until July 2008, and has also pledged to block a move to remove a surcharge tax trap for people who fail to take out health cover, which, it claims, will drive up insurance premiums and steer people away from private healthcare.
An increase to the luxury car tax was defeated in the Senate, with Steve Fielding
of Family First
joining the coalition in blocking the budget legislation. It had been supported by the government, the Australian Greens
, and independent Nick Xenophon
. It was later passed by all non-coalition Senators after amendments were made.
technology, while the Australian Conservation Foundation
has urged the government to reconsider taxes that promote the creation of pollution. However, multinational real estate
company Jones Lang LaSalle
lauded the $90 million Green Building Fund, which subsidies half the cost of fitting office blocks with environmentally friendly design features.
Senior citizen
s representative group Seniors Australia criticised the budget for not increasing the seniors pension, and Carers Australia expressed dismay over the lack of change for carer payments. A day after the Budget's release, the government promised a future inquiry into carer and pensioner payments and asserted that the pensions will increase after a specialised review.
Federal Budget (Australia)
The Australian Federal Budget is a document that demonstrates the Australian Government's planned financial performance, and the framework it intends to conduct its operations in the following financial year...
was released on 13 May 2008, with a particular emphasis on family welfare (expansive tax cuts and a lift in the threshold of the Medicare
Medicare (Australia)
Medicare is Australia's publicly funded universal health care system, operated by the government authority Medicare Australia. Medicare is intended to provide affordable treatment by doctors and in public hospitals for all resident citizens and permanent residents except for those on Norfolk Island...
levy surcharge) and capital investment (national accreditation) funds, the Federal Treasurer Wayne Swan
Wayne Swan
Wayne Maxwell Swan is the Deputy Prime Minister of Australia and an Australian politician. He has been an Australian Labor Party member of the Australian House of Representatives from 1993 to 1996, and then re elected in 1998 till today , representing the Division of Lilley, QLD...
selling it to the House of Representatives
Australian House of Representatives
The House of Representatives is one of the two houses of the Parliament of Australia; it is the lower house; the upper house is the Senate. Members of Parliament serve for terms of approximately three years....
as "a A$55 billion Working Families Support Package" that "strengthens Australia's economic foundations, and delivers for working families under pressure" from increasingly high interest rate
Interest rate
An interest rate is the rate at which interest is paid by a borrower for the use of money that they borrow from a lender. For example, a small company borrows capital from a bank to buy new assets for their business, and in return the lender receives interest at a predetermined interest rate for...
s. Total spending was cut, following on from gradual cuts of nearly 2% of GDP over the decade of the Howard government. Changes to taxation prompted then Shadow Treasurer Malcolm Turnbull
Malcolm Turnbull
Malcolm Bligh Turnbull is an Australian politician. He has been a member of the Australian House of Representatives since 2004, and was Leader of the Opposition and parliamentary leader of the Liberal Party from 16 September 2008 to 1 December 2009.Turnbull has represented the Division...
to claim the increased taxation will contribute to inflation, but Swan argued that the tax will affect only high income-earners, dispelling any "custodian" line of attack. Heavy spending by the states had been inefficient at managing past underinvestment on infrastructure, and "the conduct of expansionary monetary policies will be less complicated" as a result of the new reform agenda to avoid (supply-side) case-mix funding of the health care and vocational training sectors of the economy.
A new $3 billion tax increase on alcopop
Alcopop
Alcopop is a colloquial term describing certain flavored alcoholic beverages, including:#malt beverages to which various fruit juices or other flavorings have been added...
drinks was designed to slow down a projected increase (from the Federal Health Minister, Nicola Roxon
Nicola Roxon
Nicola Louise Roxon is an Australian politician, and is the Minister for Health and Ageing. She has been a Labor member of the Australian House of Representatives since 1998, representing the Division of Gellibrand, in the inner-western suburbs of Melbourne, Victoria.-Early and personal life:She...
, tabling Treasury
Department of the Treasury (Australia)
The Department of the Treasury is an Australian Government department. Its role is to focus and develop economic policy.-History:The Commonwealth Treasury was established in Melbourne in January 1901....
advice) in alcopop sales by 43 million bottles, curtailing binge drinking
Binge drinking
Binge drinking or heavy episodic drinking is the modern epithet for drinking alcoholic beverages with the primary intention of becoming intoxicated by heavy consumption of alcohol over a short period of time. It is a kind of purposeful drinking style that is popular in several countries worldwide,...
. However, the opposition described the increase as merely a revenue
Revenue
In business, revenue is income that a company receives from its normal business activities, usually from the sale of goods and services to customers. In many countries, such as the United Kingdom, revenue is referred to as turnover....
raiser, with Shadow Health Minister
Minister for Health and Ageing (Australia)
The Minister for Health and Ageing is a portfolio in the Government of Australia with the responsibility for national health policy. The current Minister for Health and Ageing is Nicola Roxon...
Joe Hockey
Joe Hockey
Joseph Benedict "Joe" Hockey , is an Australian politician and member of the Australian House of Representatives, representing the Division of North Sydney for the Liberal Party of Australia since 1996....
arguing that consumers of alcopop will switch to other drinks, such as champagne, and binge drinking will not decrease. In response, the Prime Minister
Prime Minister of Australia
The Prime Minister of the Commonwealth of Australia is the highest minister of the Crown, leader of the Cabinet and Head of Her Majesty's Australian Government, holding office on commission from the Governor-General of Australia. The office of Prime Minister is, in practice, the most powerful...
told Federal Parliament that the tax increase had wide support in medical and alcohol support services. Opposition Leader Brendan Nelson
Brendan Nelson
Dr Brendan John Nelson is a former Australian politician and former federal Opposition leader. He served as a member of the Australian House of Representatives from the 1996 federal election until 19 October 2009 as the Liberal member for Bradfield, a northern Sydney seat...
counter-offered with a $1.8 billion petrol tax cut
Tax cut
A tax cut is a reduction in taxes. The immediate effects of a tax cut are a decrease in the real income of the government and an increase in the real income of those whose tax rate has been lowered. Due to the perceived benefit in growing real incomes among tax payers politicians have sought to...
, reversing years of policy opposing lowering petrol taxes
Fuel taxes in Australia
The fuel tax system in Australia is very similar to Canada in terms of its double-dipping tax rates, but varies in the case of exemptions including tax credits and certain excise free fuel sources...
. The Opposition pledged to block the alcopop tax in the Senate
Australian Senate
The Senate is the upper house of the bicameral Parliament of Australia, the lower house being the House of Representatives. Senators are popularly elected under a system of proportional representation. Senators are elected for a term that is usually six years; after a double dissolution, however,...
, which it will control until July 2008, and has also pledged to block a move to remove a surcharge tax trap for people who fail to take out health cover, which, it claims, will drive up insurance premiums and steer people away from private healthcare.
An increase to the luxury car tax was defeated in the Senate, with Steve Fielding
Steve Fielding
Steven "Steve" Fielding , was a Senator representing the state of Victoria and the federal parliamentary leader of the Family First Party in Australia. Elected to the Senate at the 2004 federal election on two percent of the Victorian vote, he failed to gain re-election at the 2010 federal election...
of Family First
Family First Party
The Family First Party is a socially conservative minor political party in Australia. It has two members in the South Australian Legislative Council...
joining the coalition in blocking the budget legislation. It had been supported by the government, the Australian Greens
Australian Greens
The Australian Greens, commonly known as The Greens, is an Australian green political party.The party was formed in 1992; however, its origins can be traced to the early environmental movement in Australia and the formation of the United Tasmania Group , the first Green party in the world, which...
, and independent Nick Xenophon
Nick Xenophon
Nicholas "Nick" Xenophon is a South Australian barrister, anti-gambling campaigner and politician. He attended Prince Alfred College, and studied law at the University of Adelaide, attaining his Bachelor of Laws in 1981. Xenophon established and became principal of his own law firm, Xenophon & Co....
. It was later passed by all non-coalition Senators after amendments were made.
Reception
The World Wildlife Fund of Australia has criticised the ambiguity of the Budget's timeline for developing clean coalClean coal
Historically used to refer to technologies for reducing emissions of ash, sulfur, and heavy metals from coal combustion; the term is now commonly used to refer to carbon capture and storage technology...
technology, while the Australian Conservation Foundation
Australian Conservation Foundation
The Australian Conservation Foundation is an Australian non-profit, community-based environmental organisation focused on advocacy, policy research and community outreach.-History:...
has urged the government to reconsider taxes that promote the creation of pollution. However, multinational real estate
Real estate
In general use, esp. North American, 'real estate' is taken to mean "Property consisting of land and the buildings on it, along with its natural resources such as crops, minerals, or water; immovable property of this nature; an interest vested in this; an item of real property; buildings or...
company Jones Lang LaSalle
Jones Lang LaSalle
Jones Lang LaSalle, Inc. is a multinational financial and professional services company specializing in real estate. Global headquarters are located in Chicago, with an operational remit covering the Americas regional market...
lauded the $90 million Green Building Fund, which subsidies half the cost of fitting office blocks with environmentally friendly design features.
Senior citizen
Senior citizen
Senior citizen is a common polite designation for an elderly person in both UK and US English, and it implies or means that the person is retired. This in turn implies or in fact means that the person is over the retirement age, which varies according to country. Synonyms include pensioner in UK...
s representative group Seniors Australia criticised the budget for not increasing the seniors pension, and Carers Australia expressed dismay over the lack of change for carer payments. A day after the Budget's release, the government promised a future inquiry into carer and pensioner payments and asserted that the pensions will increase after a specialised review.