2014 Australian federal budget

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.[14] 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.[15] A surplus was projected for 2023/24.[16]

The budget forecast a deficit for 2014/15 of $29.8 billion.[1]

The budget introduced a "deficit levy" of 2% on personal incomes over $180,000,[17] which was expected to raise around $2.5 billion a year over its duration.[18] Legislation to impose the levy, called the Temporary Budget Repair Levy, was assented to on 25 June 2014,[19] and commenced on 1 July 2014 and will apply for three years.[20]

The corporate tax rate will decrease by 1.5% from 1 July 2015 to 28.5%.[17]

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.[21] Families will cease being eligible for the payment when their youngest child turns six.[22]

The indexation of the federal fuel excise was reintroduced.[18] 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.[18] The change took effect on 10 November 2014, increasing the base rate to 38.6 from 38.14¢ per litre.

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.[25] Funding for foreign aid is being frozen leading to a saving of $7.6 billion over five years.[7]

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.[26] 3,000 positions within the Australian Tax Office will be lost with thousands of staff retrenched from other major federal departments.[16] The Australian Workforce and Productivity Agency and the Australian Water Commission are to be abolished.[25] 76 government agencies will be abolished a small number merged or privatised.[27] These cutbacks are expected to save $500 million over four years.[28] The budget for the CSIRO was reduced by $146.8 million over four years.[29]

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.[17] The Schoolkids bonus is to be abolished. A Paid Parental Leave scheme is being introduced.[17] The Seniors Health Card will not be eligible to retired couples with more than $1.4 million in assets.[31] The indexation for pensions will be lowered from 2017 onwards, after it is linked to inflation rather than male average earnings.[32] New funding for the National Rental Affordability Scheme (NRAS) ceased on 1 July 2014 with funding for tenanted NRAS properties continuing.[33] The First Home Saver Accounts scheme will be abolished leading to savings of $134.3 million.[34] Documents revealed in 2018 showed that the government was considering a social security measure for this budget which would cut off income support entirely for people under 30.[35]

The budget allocated significant funding for road infrastructure in western Sydney, including for the WestConnex motorway and for roads to Badgerys Creek Airport[36] 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[37]

The budget reduced government support for renewable energy and climate change-related programs.[38]

The budget proposed to cut $4.7 billion of funding from higher education over four years. On average, the Commonwealth's contribution to the funding of university degrees was to be cut by 20%.[39] From 2016, the interest rate charged on HECS debts, which had been linked to the consumer price index was to be charged at the same rate as government long-term borrowings.[40] HECS debts would have to be repaid once an individual's income reaches $50,638.[41] Universities were to be able to set their own fees for courses under a new deregulated fee system. Modelling conducted by Universities Australia indicates that the fee to study at an Australian university will on average double in cost.[42]

$245.3 million was to be spent on continuing the school chaplaincy program over four years.[43]

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.[44]

A controversial $7 co-payment to see a bulk billing doctor, receive x-rays and get a blood test was proposed to save $3.4 billion over five years, however $5 of it will go toward medical research.[45] All 61 Medicare Locals—organisations established to plan and fund extra health services—are going to close.[7] The Senate blocked passage of the medical co-payment, but approved the establishment of the Medical Research Future Fund in August 2015, with funding to be found through reduced health spending and the Health and Hospitals Fund, until a balance of $20bn is reached in 2020.[46]

Funding for the ABC and SBS is being cut by 1% leading to costs savings of $43.5 million.[47] This is despite repeated comments by the Abbott government that funding to the ABC would not be cut,[47] which Abbott later said he regretted.[48] 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.[49] Screen Australia is losing $38 million over four years.[50]

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.[51] The next three years of funding to the National Congress of Australia's First Peoples has been cancelled.[51] Money was allocated to a school truancy officer program, extra police in remote communities and Indigenous teenage sexual health programs.[52]

Rural communities are expected to benefit from the introduction of the Green Army. The Green Army aims to provide training and experience in the environmental and heritage conservation fields for the unemployed aged 17–24 years.[29] Funding for community Landcare grants has been reduced and replaced by the establishment of the National Landcare Program.[53]

Commonwealth Scientific and Industrial Research Organisation is to see its budget cut by $AU114 million, forcing the closure of two historic radio telescopes.[54]