Scott Morrison and Mathias Cormann. The midyear economic and fiscal outlook, also known as MYEFO, expects the unemployment rate to fall to 5.25% by mid next year. (Photograph: Lukas Coch/AAP)
The government is talking up a projected budget surplus in 2020-21, and has unveiled $2.1bn of new funding cuts to Higher Education.
Students will also have to begin repaying debts once their income reaches $45,000.
The Newly Arrived Resident’s Waiting Period (NARWP) will be extended from 2 to 3 years. This means Kiwis who are granted permanent visas will face a longer wait before being eligible for a range of welfare payments.
Oz Kiwi will share more information as it becomes available.
Morrison unveils cuts to welfare, universities and family payments
18 December 2017
Katharine Murphy and Gareth Hutchens
The Coalition’s midyear budget update forecasts surplus of $10.2bn in 2020-21 and says weak wages likely to remain.
The Turnbull government is forecasting a larger surplus of $10.2bn in 2020-21, revised up from $7.4bn, after unveiling new cuts to welfare, family payments and higher education.
In a six-monthly update of the May budget, the government says higher than expected commodity prices in 2017, stronger than expected company profits and superannuation taxes, and more Tax Office enforcement activity, have seen tax receipts revised up by $3.6bn in 2017-18.
But historically-weak wages growth is weighing on the budget, with wages in both the public and private sectors being more subdued than expected six months ago, with one consequence being that nominal GDP growth has been revised down to just 3.5% in 2017-18, from 4% in May.
While the government will trumpet the improved trajectory to surplus, it has used the end of year Treasury update to unveil new cuts to the university sector worth $2.1bn.
The government has abandoned a higher education package outlined at the May budget that would have cut $2.8bn from the sector and replaced it with cuts worth $2.1bn. The revised package will see students having to repay debts once their income reaches $45,000.
The government has produced a new savings measure worth $1.2bn over four years achieved by broadening the criteria for waiting periods for newly arrived migrants before they can access welfare payments.
From July 2018, the current two-year waiting period for family payments, including family tax benefit, paid parental leave and carers allowance, will be extended to three years. [SCV-holders will to continue to access PPL and FTB without a waiting period].
The government will save $400 m by withholding lump sum payments under family tax benefits for people with outstanding social security, student assistance, or paid parental leave debts from December 2018.
The government will also save $1bn over four years by tightening payments to family day care services as it transitions to the New Child Care Package that will begin on 2 July 2018.
Speaking at a press conference on Monday after the budget-update was released, Treasurer Scott Morrison said the Coalition’s plan to return the budget to surplus by 2020-21 was still on track, with Treasury estimating the deficit for 2017-18 would be $23.6bn, an improvement of $5.8bn from six months ago.
He said the government expected the deficit to decline further in 2018-19, to $20.5bn, and then to $2.6bn in 2019-20, before recording a higher-than-expected surplus of $10.2bn in 2020-21.
Those numbers will have to be achieved in the face of historically-weak wages growth and worryingly weak consumer spending.
[Read the Guardian article].
Find out about planned restrictions on new migrants accessing certain welfare benefits in Part 1: Overview (page 9) the Mid-Year Economic and Fiscal Outlook 2017-18.
Proposed changes to Higher Education
Centrelink entitlements for permanent residents