Budget announcements are just that – an announcement of the Government’s proposals. Before becoming law, these measures require the support of both houses of parliament and therefore, it is after the Budget when the various opposition parties get involved that the horse trading begins and the fate of each proposal is decided. On 15 May, opposition leader Bill Shorten made his first Federal Budget response speech and it is obvious that the Government will have to seek support for its proposals elsewhere to get them passed through the Senate. The new Senate sits from 1 July this year and the total 76 seats will be made up as follows:When all Senators attend a vote, a measure needs the support of 39 Senators to pass. As can be seen from the table above, even if the Government receives the support of all the independents, they are still one vote short, and that is before taking into account that one of the independents, Ricky Muir (Motoring Enthusiast Party) has stated that he will vote in line with the Palmer United Party. In Bill Shorten’s Budget reply speech, he stated that Labor will combine with the Greens in the Senate to block a number of the key measures announced in the Budget. Based on this speech and other comments by the party leaders, a number of measures are likely to be opposed. Where a measure is opposed by Labor, the Greens and the Palmer United Party, the measure is unlikely to be implemented, at least in its announced form. This page tracks the various measures and the opposition party responses with a view to getting an insight into how likely they are to be implemented, and if so, in what form.
Introduction of a Temporary Budget Repair Levy (TBRL)
1 July 2014
The Government moved quickly to implement this measure and introduced the 15 supporting Bills to the Parliament the same night as the Budget. While all opposition parties cast the measure as a broken promise, they supported Bills passing the lower house on 28 May 2014 with the support of Labor, the Bills passed the Senate a few days ago and will come into force on July 1.
Delay in future superannuation guarantee (SG) rate increases
1 July 2015
While Labor and the Greens have blocked previous legislation from the Coalition Government to delay increasing the superannuation guarantee, this was when it was contained in legislation repealing the Minerals Resource Rent Tax. Neither of those parties have voiced an objection to the new proposal delaying the increase in superannuation guarantee and therefore, it could find support from an opposition party to allow it to go through.
Increasing the Age Pension qualifying age to 70
1 July 2023
On 14 May 2014, the Sydney Morning Herald reported that “Opposition Leader Bill Shorten has confirmed Labor will vote against the coalition’s move to ….change the pension age”. In addition, the leader of the Greens stated on ABC Radio National on May 15 2014 “I don’t think we should be raising the pension age to 70 at all.” The Palmer United Party is also unlikely to support the measure with the Australian Financial Review reporting on 6 May 2014 “The Abbott government’s plans to raise the pension age to 70 by 2035 are under threat from Clive Palmer, who said he will not support the change”.
Indexing Pension and Pension Equivalent Payments by CPI
1 July 2014
1 July 2014 for Parenting Payment (single) and 1 September 2017 for pensions While all opposition parties have spoken out against this measure, they have not declared their voting intention should the measure be introduced to Parliament. It is likely that this measure is one of a number that will be up for negotiation.
Adjustments to Family Tax Benefits
1 July 2015
While the minor parties have generally ignored this measure, Labor have provided strong indications of their intentions when these measures get introduced. On 27 May 2014, the ABC reported that Labour would not support halting FTB Part B when youngest turns six or a two-year freeze to family payments. However, the same report quoted Labor’s Families spokeswoman Jenny Macklin as saying that other measures, including a drop in the primary income threshold for FTB-B from $150,000 to $100,000 are on the table.
Reduced eligibility to Newstart Allowance and Sickness Allowance
1 January 2015
While all opposition parties have spoken out against this measure, Labor in particular, it is not clear what, if any components they might support. As such, it is possible that some components of this proposal could get passed in some form.
Introducing patient contributions for general practitioners, pathology and diagnostic imaging services and reducing rebates
1 January 2015
On 14 May 2014, the Sydney Morning Herald reported that “Opposition Leader Bill Shorten has confirmed Labor will vote against the coalition’s move to introduce a $7 Medicare co-payment.” The Greens and the Palmer United Party have similarly indicated that they would not support the measure.
Paid Parental Leave
1 July 2015
While not a Budget measure, the Government did use the Budget to express their continued support for this election commitment. Labour have voiced their opposition to this measure, however the Government is still hopeful of implementing it. As the Sydney Morning Herald reported on 25 May 2014 “Mr Abbott is still hoping the Greens will support several of his policies, including paid parental leave…”
Regardless of where you are placed in life – whether you are a wealth accumulator, pre-retiree, retiree or small business owner – it is important to understand the impacts of each proposal and to have a plan in place to maximise potential opportunities and changes.
If you have any questions about how the Budget or other Government measures may impact you or your family please do not hesitate to call Rob MacLean on 02 9492 0444.