GRACosway Weekly Policy Wrap Up

6 May 2016

The Prime Minster is expected to visit the Governor-General this weekend to call for a double dissolution election on 2 July 2016. At close to eight weeks, this will be one of the longest campaigns in the nation’s history beaten only by Robert Menzies’ 94-day campaign in 1954, an era before television and the 24-hour news cycle.

Treasurer Scott Morrison delivered the Government’s third budget on Tuesday night – his first as Treasurer – which predicts an operating deficit of $37.1 billion, or 2.2 per cent of GDP, in 2016-17. In his speech, the Treasurer described the Budget as “practical, targeted and responsible”, and said it constituted an economic plan for an economy in transition. Despite being handed down only days before the imminent start of an election campaign, the Budget offered only modest new spending commitments and was described by the ABC as “not the typical pre-election cash splash”.

The Government’s Ten Year Enterprise Tax Plan – the centrepiece of Tuesday’s Budget – will lower the small business tax rate to 27.5 per cent and outlines a plan to reduce company tax to 25 per cent for all business by 2026-27. The Budget also contains significant changes to superannuation by increasing the concessional contribution rate from 15 to 30 per cent for incomes over $250,000, and introduces a lifetime non-concessional contributions cap of $500,000. Modest tax relief for middle income earners was also announced, with the upper limit for the middle income bracket of 37 per cent lifted from $80,000 to $87,000 per year. See GRACosway’s Federal Budget brief from earlier in the week here.

In delivering his budget reply speech on Thursday, Opposition Leader Bill Shorten said the Budget was one which demonstrated the Government’s “same wrong priorities” and failed the test of fiscal responsibility. Mr Shorten said a Labor Government will invest in education, directly fund the construction of public transport projects, and maintain the fairness and integrity of superannuation. Read Mr Shorten’s Budget in Reply Speech here.

Also this week, Prime Minister Malcom Turnbull met with French Prime Minister Manuel Valls in Canberra to discuss the construction of Australia’s next fleet of submarines by French company DCNS, as well as discuss a 50-year alliance between Australia and France. Mr Turnbull said the bilateral relationship went beyond the matter of submarines as both nations work closely together “in freedom’s cause”.

In Queensland, Tim Nicholls narrowly defeated Lawrence Springborg in a second round ballot on Friday to become Leader of the Liberal National Party and Leader of the Opposition, 22 votes to 19. Deb Frecklington was elected unopposed as Mr Nicholls’ Deputy after John-Paul Langbroek stood aside; she is the first woman to hold this position in the LNP. Mr Nicholls, who entered Parliament in 2006, served as Treasurer to Campbell Newman and was a chief proponent of the Newman Government’s $33 billion asset leasing program, which was largely responsible for the LNP Government’s defeat. Read more coverage in The Australian here.

The final report on South Australia’s Royal Commission into the Nuclear Fuel Cycle was handed to the State Government on Friday, with findings to be made public on Monday. Royal Commissioner Kevin Scarce delivered an interim report to the Government earlier this year, which found a 138,000 tonne waste storage facility could be expected to generate revenue of more than $257 billion for the State over a 120 year period.

SA and WA parliaments sit next week.

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