How Budget 2014 Will Hit Your Wallet

The first budget for the Abbott government is packed with broken promises and fiscal austerity. But whether you support it or hate it, it's going to make a difference to how you earn and spend your money. Here's what's changing (and when).

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In this roundup, we're focusing on the stuff that will directly impact individuals: where you'll pay more (or receive less), and when that will happen. If you want a broader overview of how the Budget impacts technology, Luke at Gizmodo has you covered, with pieces on what's happening to science funding, online censorship, the NBN and game industry funding.

Petrol prices go up

Fuel excise rates are now going to be reindexed every six months, starting from 1 August. It's estimated that this will result in an increase of 1 cent/litre every year (independent of other pricing changes). Bottom line: fuel will cost you more.

Everyone pays to go to the doctor

Even if your doctor offers bulk billing, you'll have to pay $7 per visit from 1 July 2015. If your doctor bills you directly, you'll pay an extra $5 per visit. Extra fees will also apply if you go to a hospital emergency department and it decides you could have gone to a GP instead. Children under 16 and people with concession cards will only have to pay for a maximum of 10 visits a year.

Another health change: Medicare will only cover one free eye examination every three years, rather than every two years. If you buy a medicine covered by the pharmaceutical benefits scheme, you'll have to pay an additional $5 towards costs, as the maximum contribution has been increased to $42.70.

Increased taxes

As was widely foreshadowed, if you earn above $180,000, you'll pay an extra 2 per cent tax in the 2014/2015 tax year, and for the two years after that. Budget figures suggest this will impact around 400,000 people.

A bigger impact: Access to Family Tax Benefit Part B is being tightened. This will now cut out if the main income earner in a family earns more than $100,000, down from a previous cap of $150,000. It will also stop as soon as the youngest child in the family turns six. Currently, around 60 per cent of households receive the benefit. It will also be frozen for the next two years, with no changes for inflation.

Higher university fees

From July 2016, students with HELP debts will have to begin repayments when their income hits $50,638 a year, down 10 per cent from the current level. This only applies to new students; for current students, existing arrangements remain in place until 2020. Universities will also be allowed to set their own course fees without any cap applying, so some courses will become more expensive. This will kick in from 2015 as well.

Interest rates for HELP indexation will no longer be capped at the rate of inflation, but instead at the level of government borrowing — which means they're likely to increase faster, making repayments a higher priority for some graduates.

Lifehacker's weekly Loaded column looks at better ways to manage (and stop worrying about) your money.


Comments

    It'll be interesting to see how they handle the 'no free health care' thing, now.
    I wonder if they'll go the route of turning away those who can't pay, or send debt collectors after people who haven't paid their $7 invoice...

      Surely they could just short-pay next week's centrelink payment by $7, and the recipient will have to forgo their cask of wine for the week.

        Yes, because everyone on welfare is scum, you elitist wanker.

          Yes, because resenting welfare bludgers, makes you an elitist wanker.

            You're more than welcome to resent welfare bludgers, but you're less welcome to behave as if everyone receiving welfare is a bludger (or indeed that every alcoholic is a bludger either, or even every alcoholic receiving welfare payments).

        More like their travel ticket or food.
        The dole is like $220 a week. No one is living large on that.
        Also, what mrvajj said

        Bloody students! Exploiting our welfare system!!!!

        I remember when i was a student on austudy i was rolling in cash!

        So I guess it's only OK to go to uni if your parents can support you. Having the initiative and determination to work while going to uni and living on your own must make you a terrible person if it means you need a *government subsidy* to buy food, hey.

          go to tafe

            Yeah, because stratifying education by income is a great idea. Who doesn't miss having an aristocracy, right?

              I went to tafe. and I shit all over my friends that went and got a university "education" if people want to spend tens of thousands a year on something of dubious value, I don't want to be picking up the Bill for that.

                1. TAFE is also widely subsidised.
                2. If you get cancer and need treatment I don't want to be picking up the bill for that. Yet because we live in a democracy with a public welfare, education, and healthcare system I pick up the bill nonetheless.
                3. If you are shitting all over your friends, I don't know how long they will stay your friends.

                Last edited 16/05/14 9:34 am

                  getting cancer is not a choice. I have private health insurance so you can keep your money.

                  @pukoh
                  Getting treatment for cancer is a choice. You don't have to do it.
                  Also, having private health insurance doesn't mean that there isn't public expenditure on your treatment. Especially if you need high-level treatment, it will probably be at least partly public funded.

                  That aside, TAFE remains widely subsidised. Also, assuming that you do 'shit all over your friends', so to speak, who went and got university education that can't speak to the wider impact of university or TAFE education (for the exact same reason that medication is tested with more than one person taking it and a handful of people not taking it). Whether your experience is typical would depend on whether you are representative of people who go to TAFE and your friends are representative of people who go to university.
                  Also, there are some things you can't study at TAFE. For example, if you force people to pay for their own education then the only people who become doctors of medicine are those who can afford to study at a university for many years. The same would apply to physicists, biologists, mechanical engineers, and a whole range of other areas.

                  Since there have been increases in the achievable incomes for tradespeople the income gap between university graduates and TAFE graduates has changed: being university educated no longer guarantees a higher income (and in a range of areas may result in a lower income). If studying at university is not only very expensive, but also doesn't provide a high ongoing income then the issue of 'aristocracy' is amplified because people can only afford to study something that doesn't necessarily pay well (for example, linguistics) if they have family to pay off the cost of education (because the student's own long-term income wouldn't necessarily cover the loan repayments and cost of living concurrently).

                  Last edited 19/05/14 12:15 pm

      It will just be a turn away system I'd gather. Otherwise the admin costs would take a good chunk of the $7 gain.

        Maybe at GPs. Not sure about ERs, though. Last time I was at a hospital to pick up antibiotics on a weekend, they sent me an invoice which... (*shuffles feet guiltily*) I totally forgot to pay, and ended up getting chased by SPER. (Same guys who chase speeding tickets etc.) I think it was $14 or something really tiny.

        Neither option is really good though. One of the best things we've been able to claim for ourselves is a country is that at least we're not like America. Especially in our health care.

        It's a sad day for the nation every time we get closer to being like the US.

      hopefully the $7 will stop people going to the doctor to say hello and getting a certificate, therefore reducing the strain on the system. so the $7 is a deterrent rather than revenue generator.

        I take the exact opposite stance.

        Some workplaces make you get a certificate for any absences adjacent to public holidays or weekends, or just for any absence whatsoever.

        If it wasn't already a kick in the teeth to have to drag your disease-ridden ass into a waiting room full of even more infection (especially when driving is the LAST thing you should be doing - so, that or take a taxi or take a family member offline) just to have a doctor tell you shit you already know - ie: you should be getting bed-rest, fluids, avoiding stress and waiting for your body to recover, it's a complete prick move to then kick you while you're down by charging you extra for the privilege of that wasted time and energy for the sake of bullshit bureaucracy. (Especially if you're in the unfortunate contract situation of not getting paid/getting reduced pay for that time.)

        Let's punish everyone for the behaviour of a few, which isn't going to change anyway? Complete dick move. Not to mention it'd hardly be a deterrent to anyone who's already willing to go to the effort of a doctor visit JUST for an unwarranted day off.

        Last edited 14/05/14 12:03 pm

        The ultimate problem with the $7 is that it is likely to increase long-term health costs because people who need to see a doctor but for whom $7 is a consequential amount of money will delay doing so (or not do so at all).
        There is a good article on The Conversation website in which a number of public health experts discuss the changes to health funding in the budget. It raises the issues that the $7 increase may impact preventative healthcare with a resulting long-term increase in health costs as well as other related issues.

    This budget is one of the worst I've seen
    - pollies (after huge pay increases) will take a pay freeze for 12 months. Major self licking icecream
    - all aspects impacting the rich are temporary
    - all aspects impacting the poor are permanent (eg. Petrol)

    Even the very wealthy get ridiculous maternity leave payments (and I'm a family man).

    This budget hurts the poor and heavily favours the wealthy. It's unforgivable, but libs love the upper 1% of the population.

      Wealthy people buy petrol and go to the doctor and buy PBS medicines too.

      How can handing a welfare payment to 60% of households be a sustainable situation? Why should someone's desire to pop out a baby mean that everyone else has to pay for it?

        I also agree that the current welfare system in Australia is flawed. The dole needs to be rethinked.

        But the taxation over wealthy people needs to be tougher. Do you think a $7 increases to visit the GP will impact people with $200,000.00 income as much as someone earning $20,000.00? And yeah those Ferraris and Maseratis sure burn a lot of fuel, but again they can afford the fuel, while the guy driving his 1992 Holden Barina to go work at Maccas will struggle a bit more.

        Finally I noticed that there will be a lot of infrastructure investment, with ports and airports. Possibly to attract foreign money, which yeah, can help the economy.

        But at the same time, they are cutting a lot of costs with technology, outdated NBN and more cuts in education.

        In 10 - 15 years time, when the foreign investors notice the massive lack of skill in Australia, do you think they will keep their companies here? A lot of kids leaving high school will look into those new fees and think "hell I'll just become a tradie" (all due respect to tradies, but we do need some engineers, IT personnel and other future technology professionals).

        If we had a highly educated and skilled society Holden and Toyota closure wouldnt impact as much.

        This budget is, in my opinion, shortsighted and only trying to fix a immediate problem to keep the Liberal Party in power (don't care if they are liberal, labour, greens or pirate party.)

        Wealthy people do indeed buy petrol and go to the doctor and buy PBS medicines. However, for several reasons those on lower incomes are disproportionately affected.
        First, those who are on lower incomes do not have the same ability to live near workplaces because their options are more dictated by cost. This is particularly the case if they work in the CBD or a suburban centre such as Camberwell (in Melbourne). They are instead more likely to be living in cheaper areas which often also have poorer public transport. Thus, they will tend to need to drive more in order to reach their place of work. As a result, they will probably use more fuel. (There is also the issue of newer cars/greater fuel efficiency but we'll leave that to the side for the moment).
        Second, all of the things you mentioned are broadly non-progressive taxes: If I earn 200k and have to pay $7 for my doctor's appointment then that is a very, very small proportion of my total income. If I'm earning 40k it is a substantially larger part of my total income. When you take into account basic costs of living and thus only discretionary income, then the difference is even greater.
        Similarly with the petrol excise, an equal increase in price has a disproportionately greater impact on those with lower income even if they use the same amount of petrol (because each dollar is worth more to them because they have fewer of them).

        With PBS medicines it is a bit different, because those with health care cards actually have a smaller increase.

        Basically, non-progressive taxes disproportionately affect those on lower incomes. That's just kind of the way it works.

        Edit: @elthaco already said much of what I was saying. That'll teach me to respond without reading all the comments first.

        Last edited 15/05/14 2:01 pm

    Looks to me like the LNP is rewarding those who earn enough to live their chosen lifestyle (ie. taxing the poor), or rich enough to manage your finances (ie. taxing high income earners, but lowering company taxes) - at the expense of those who've become accustomed to living on the welfare of others (or are high-income earners who can't minimse their tax).

    I'd show some sympathy, but if more people in those two groups had voted labor, I'd have my f*cking NBN.

    I can deal with having to pay my Uni fees earlier and paying a little extra for fuel in return for better roads. I cannot deal with hitting pensioners for Health care costs and increasing the retirement age , I know personally how hard it is for my grandparents on the pension and they should be making it easier for them, not harder.
    I would happily see the NBN downgraded and more money given to pensioners or disabled welfare receivers , but it seems all the savings are lining the pockets of the already rich.

    But these politicians don't care because they wont ever need to worry about working till they are 70 or having to live of anything but their government pension which is higher that anything most working people in Australia earn in a year.

    Good on em ' ! There will be a pack of new jerks in after the next election that will continue to disappoint the people who genuinely need help in Australia

      I really want to see a hung parliament next election, with government formed by a coalition of independents and minor parties, instead of the two big boys trading turns and sulking when it's not their turn, but secure in the knowledge that they'll still get a go eventually.

        "I really want to see parliament hung"

        FTFY :)

    a little more in fuel? it is not just a little, indexed twice a year, and GST on top of that.

    australia is going to go backwards.

      1c? The weekly petrol price cycle is at least 10 times that.

      I'm not saying its a good thing , I hate that I have to pay more on a tank of fuel than I already do... I'm just saying that hitting pensioners is borderline criminal .

    "Bottom line: fuel will cost you more."

    Fuel, so stable in price.

    Well then, I guess I'll just take my petrol car off the road and replace it with one that runs on renewable energy.

    Oh wait, ARENA has had funding cuts too, and I'm not rich enough to buy an electric car. Never mind then, I guess I'll just go back to living between a rock and a hard place.

    Wow, some very brutal discussions going on
    I come from a very low income household where i had to work full time from an early age to help my family and because of that and several other factors i never was eligible to govt benefits (too much income for a person my age), so when the time to do after highschool education i had to pay every cent out of my pocket which hurt alot.
    I love alot of these budgets coming in because i truly believe it will help improve my area by forcing perfectly capable people on the dole to work, In my apartment complex (18 units) only 3 people have jobs and the rest are on the dole / govt benefits and i have spoken to a few of these people over the past few months and they all dont want to work because the govt is providing enough for them to survive which just sickens me.
    On the other extreme, my Aunt lives in a remote rural community where there genuinely isnt any work and she has been kicked off benefits and is now forced to drive 4 hours to her job.

    There will ALWAYS be different opinions to each factor because everyone is unique from unique areas and its impossible to please everyone (one mans trash is another mans treasure).
    Finding a job isnt hard at all, finding a career is the hard part

    At the end of the day, i will do what is required to support myself and my family as they are my priority and if that means forking out $7 every few month for proper medical attention thats a price im willing to pay, hell id pay $10,000 without question (money i dont have but i will find a way to make it)

      the world would be a better place if there were more people like you

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