14th May 2021
The Budget: Winners and Losers
Treasurer Josh Frydenberg and the Australian Government handed down budget 2021/22 at 7:30pm on Tuesday 11 May 2021. The strategy - “Securing Australia’s recovery”. Now, who won and who lost from the expected $589.3 billion budget? Here are a few.
Low and middle income earners will win as a result of the extension of the Low and Middle Income Tax Offset. Taxpayers could receive up to $1,080 in offset after completing their tax return (or up to $2,160 for couples). Here are the brackets:
Last year's budget was criticised for its lack in this area. So, the government will spend $3.4 billion over the next five years across childcare subsidies, domestic violence support services and medical research for conditions affecting women. The aim is to increase participation by women in the workforce and support women’s safety, health and wellbeing, and economic security as described by the budget overview.
An additional $2.3 billion will fund the National Mental Health and Suicide Prevention Plan. The budget describes “Five Pillars of Support” - Prevention and Early Intervention; Suicide Prevention; Treatment; Supporting the Vulnerable; and Workforce and Governance.
Other winners: Vaccines, Aged care, Preschool, Gaming, Businesses, Farmers, Medical start-ups
The budget does not offer great support for the combat against climate change. While the Morrison government is committing $539 million towards two “clean” energy schemes, Climate Council and The Australia Institute warn that unless the projects use entirely renewable power, emissions will continue to impact the environment.
New Residents, Tourism and Migration
Foreigners will lose with the 2021/22 budget as new residents could wait up to four years to receive most welfare payments, saving taxpayers $671 million over five years. Furthermore, as borders continue to stay shut, migration into the country and subsequently international tourism will suffer. Also, foreign aid spending will fall by 10.5% next year and then 4% each year for the next three years.
The impact of international travel will hit universities who rely on international students, as some students now are turning to universities in the US and UK.
Finally, here's a look at where the $496.6 billion is expected to come from:
And where the $589.3 billion is expected to be spent:
Federal Court Officially Approves Telstra’s $50 Million Fine
ACCC’s investigation and proceedings with Telstra has come to an end, with the Federal court approving a 50-million-dollar settlement from Telstra, Australia’s second largest monetary fine in Australian consumer law history since Volkswagen’s emission scandal in 2015.
Attributed to financial incentive systems which encouraged staff to engage in improper practices in order to meet sales targets, ACCC discovered that Telstra licensee stores sold postpaid mobile phone plans to approximately 108 customers, who identify as Aboriginal or Torres Strait Islander, who were unable to understand the details, nor could afford them. This left Indigenous Australian customers with an average debt of $7400 – a significant hardship for a community with cultural, social and language vulnerabilities.
While the maximum penalty was $131 million, Federal Court Justice Debra Mortimer instead accepted a $50 million fine, due to Telstra’s public apology and cooperation throughout the Federal court proceedings.
Telstra CEO Andrew Penn released a statement on Telstra news after the Federal Court’s formal approval of the settlement, detailing steps taken to compensate affected Indigenous Australians. Additionally, Penn reveals programs and changes now put in place to support the vulnerable minority moving forward as part of the legal process with ACCC. Vowing to create a ‘positive difference’ in the Indigenous communities, Telstra has implemented programs such as First Nations connect hotline and cultural awareness training for staff as well as appointed a new Indigenous Cultural compliance officer and released a new indigenous policy statement.
Recognising the significantly adverse impacts on the community, Penn, in his statement, pledged to spend more time understanding and supporting Aboriginal and Torres Strait Islander peoples to ‘build connection and a partnership’ with the communities moving forward.
The views expressed within this article are those of the authors and do not represent the views of the Finance Student's Association. All images and references in this article are for fair and educational purposes only. The content in this article is not intended as legal, financial or investment advice and should not be construed or relied on as such.