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2019-20 Federal Election and Budget

2019-20 Federal Election and Budget

Written by: 
Evan Lowenstein

2019-20 Federal Budget: an election, a surplus, personal tax cuts but no help for the artist.

In a surprise to everyone, including all the pundits and pollsters, the Liberal National Coalition won a convincing victory in the federal election held on 18 May 2019.

It looks like Scott Morrison and his team will have a comfortable working majority of 77 seats to the ALP’s 68 seats.

Despite all the polls, this was an election result for the history books with a swing recorded to the Liberal National Coalition of 1.04%.

The results in the Senate show a much friendlier attitude to the Liberal National Coalition than in the last parliament, with the Coalition now only requiring five cross-benchers to support the passing of legislation, as opposed to the balance of power in the last parliament which was quite an unruly mixture.

The result means that all the Budget measures announced on 2 April 2019 will no doubt be passed.

At the centrepiece of the Budget were the tax cuts that effectively promised to give most middle income earners a large benefit.

From 1 July 2024 the government  plans to lower the 32.5% tax rate to 30%. This rate will cover all taxpayers earning between $45,000 and $200,000 and it will mean that 94% of taxpayers will pay no more than 30 cents tax in the dollar.

Despite these cuts being about five years away, in the interim - commencing this year - there are plans to increase the low income threshold by more than doubling the low and middle income tax offset up to $1,080 from 2018-19. Taxpayers earning up to $126,000 a year will receive this tax cut. The Treasurer said that for a single income family, this means up to $1,080 in their pocket per year. And for families on a dual income, up to $2,160.

As a sweetener for businesses, the instant asset write-off will increase from $25,000 to $30,000. The write-off threshold will also be extended to apply to businesses with a turnover of up to $50 million - this measure will only apply to 30 June 2020.

On the whole the Budget was seen by financial commentators as having more 'winners' than 'losers' and perhaps this perception was one of the reasons for the Coalition’s election win last month.

In an election Budget, the Treasurer, Josh Frydenberg announced the first Budget surplus in more than a decade at $7.1 billion for 2019-20. There are projected surpluses in all of the 4 years forward. The government says the economy is forecast to grow by 2.75% in 2019-20 and 2020-21.

Arts and the Budget

It will come as no surprise that Treasurer, Josh Frydenberg’s, pre-election Budget provided a $393.7 million boost for the arts and communications portfolio but simultaneously demonstrated the Morrison Government’s lack of interest and understanding of the sector.

There were some large boosts to the music industry with increase in funds to music creation  but a lot of funding increases went to historical issues as in restoration of monuments and museums rather than to restoring more funding to individual artists.

There does not appear to be any government commitment towards redressing the debilitating cuts that have damaged the arts industry, making it hard for the arts community in the year ahead.