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Ensuring that the Government lives within its means

Balancing the budget and reducing the burden of long term debt

Spending only what taxpayers can afford

Making reforms affordable and sustainable

A stronger focus on youth

The Government is providing greater support for vulnerable young job seekers through the $840.3 million Youth Employment Package, which will be funded through savings achieved from the wage subsidy pool and modification of the Work for the Dole phase.

From 1 October 2016, the most job-ready job seekers will commence the Work for the Dole phase after spending 12 months in jobactive services, instead of the current requirement of six months. This will better target the Work for the Dole programme, providing an opportunity for job seekers to focus on finding a job, for example through the new Youth Jobs PaTH programme, before moving to the Work for the Dole activity phase.

Wage subsidy arrangements will also be simplified and made more flexible for employers. Enhanced wage subsidy arrangements will benefit job seekers including young people, the mature-aged, indigenous people, parents and long-term unemployed.

Affordable reform

The Government remains committed to providing parents with more choice and opportunity to work through the Jobs for Families Child Care package announced at the 2015-16 Budget. This package will create a simpler, more affordable, accessible and flexible child care system and will see the Government invest more than $40 billion in child care support over the next four years.

To fund this child care package, the Government is restructuring Family Tax Benefit (FTB) payments to give more targeted assistance to families and encourage workforce participation. Given the uncertainty regarding the passage of the legislation enabling the FTB changes, the new Child Care Subsidy, Community Child Care Fund and the Additional Child Care Subsidy will now commence on 1 July 2018.

The Government is implementing the rest of the child care package. This includes extending the Nanny Pilot programme to 30 June 2018 to provide assistance to more families who are having difficulty in accessing mainstream child care and allowing time to refine the programme based on experience. The Government is also implementing the Inclusion Support Programme to provide additional care for vulnerable children commencing on 1 July 2016.

More targeted spending

The Government will direct spending to where it is most needed and most effective

More effective health spending

The Government will establish a $1.7 billion Child and Adult Public Dental Scheme to ensure that dental spending is prioritised to those most in need. To fund this new Scheme, savings have been redirected from existing dental programmes that are either underutilised or inefficient.

As agreed at the April 2016 Council of Australian Governments meeting, the Commonwealth will provide an estimated additional $2.9 billion over three years from 1 July 2017 to the States and Territories for public hospitals. This is on top of more than $18 billion per annum already budgeted for over that period, with a focus on improving quality and patient safety.

In addition, the Government will provide $21.3 million to trial ‘Health Care Homes’ to improve health care for Australians with chronic diseases and complex conditions – aiming to keep them out of hospital and living healthier lives at home.

The Government will also raise the Medicare Levy low-income thresholds for the 2015-16 financial year to keep up with inflation. This will ensure that low income households will continue to be exempt from the Medicare Levy.

To help fund these health care improvements the Government will maintain the current level of Medicare Benefits Schedule fees for all services provided by GPs, specialists, allied health and other health practitioners until June 2020.

In addition, the Government will maintain the current income thresholds for the Medicare Levy Surcharge and Private Health Insurance Rebate for a further three years until 1 July 2021.

Sustainable aged care funding

The Government will refine the complex health component of the aged care funding formula to address unsustainable spending, which is growing two and a half times faster than the other funding components. Savings arising from better targeting of the funding that aged care providers receive will provide the ability to introduce new aged care initiatives and help meet the continued growth in aged care funding overall.

Consistent with the Aged Care Roadmap, the Government will reinvest $249 million to improve aged care, including $102.3 million on the Aged Care Viability Supplement, to help aged care providers in rural and remote areas better manage the cost pressures they face due to their isolation and small size. $136.6 million will also be directed to the My Aged Care contact centre to meet increasing demand for information on aged care.

A strong safety net for Australia's most vulnerable

Improving the integrity of the welfare system

Better targeting and strengthened integrity

The welfare system must be well-targeted to those who need help the most, and continue to provide a safety net for Australia’s most vulnerable people and families. Protecting the integrity of the welfare system helps ensure that the underlying principle of equity is maintained, whilst supporting people to work where they can. The best form of welfare remains a job, and helping people avoid the need for support and assistance remains a core objective for the Government.

In the 2015-16 Budget, the Government announced it will progressively replace Centrelink’s ageing technology platform with a new welfare payment information and communications technology system. This is a vital step towards a newer, simpler and more efficient system to support the timely implementation of policy changes.

These system improvements will integrate with real time reporting of fortnightly income and sharing of data between Centrelink and the ATO. The Single Touch Payroll innovation will assist Centrelink to ensure that welfare recipients do not unintentionally incur debts to the Commonwealth by under-estimating their income. It will also identify people who make false declarations and ensure that Commonwealth debt held by individuals is more effectively recovered.

In November 2015, the Government announced the establishment of Taskforce Integrity, a Department of Human Services led initiative aimed at targeting welfare fraud. This Taskforce identifies people who deliberately withhold or provide false information to claim welfare payments.

A sustainable welfare system

In the 2016-17 Budget, the Government is committed to a sustainable welfare system by ensuring that those who are able to work are supported and encouraged to do so. Over the next three years, up to 90,000 current Disability Support Pension (DSP) recipients will have their DSP eligibility reviewed to assess their capacity to work. There will also be up to 30,000 Disability Medical Assessments for current DSP recipients considered to be a high risk of not being eligible for the payment.

These measures will enhance the integrity of Australia’s social safety net by making sure that the only people who receive DSP are those who have significant physical, intellectual or psychiatric impairments.

These measures demonstrate the Government’s ongoing commitment to ensure that those who need assistance receive that assistance, with savings from increased integrity contributing to the sustainability of important welfare programmes such as the National Disability Insurance Scheme (NDIS).

NDIS Savings Fund

To that end, the Government is establishing the NDIS Savings Fund to ensure the Commonwealth is able to meet future NDIS costs. In the 2016-17 Budget, savings totalling $2.1 billion will be credited to the Fund. This is real money for a real commitment to the NDIS.

Fixing problems in our tax system

Targeting revenue measures to pay for essential services in a more sustainable way

This Budget includes targeted revenue measures to help ensure multinationals pay the right amount of tax to support the services Australians need.

Targeting tax avoidance

The Government is committed to ensuring that all businesses pay the right amount of tax and is introducing tougher rules to target multinational corporations who avoid paying tax in Australia.

The Government is introducing a new Diverted Profits Tax that will complement and further strengthen Australia’s Multinational Anti-Avoidance Law (MAAL) passed by Parliament in December 2015. The new Diverted Profits Tax will increase Government revenue by an estimated $100 million per year from 2018-19.

The Diverted Profits Tax will help ensure that the right amount of tax is paid on profits made in Australia by multinationals and is aimed at encouraging greater compliance with Australia’s tax laws.

A newly established Tax Avoidance Taskforce will give the ATO more resources to crack down on tax avoidance by multinationals and high wealth individuals. The Government will invest an additional $679 million in funding and over 1,000 experts in the Taskforce.

This increased funding for ATO compliance programmes will improve tax compliance in high risk sectors, resulting in better targeted audits and an expected $3.7 billion of additional Government revenue over the next four years, $450 million of which is generated from the MAAL.

Making the superannuation system more sustainable

Reforms to the taxation of superannuation, together with the Government’s broader superannuation reform agenda, will support our world class superannuation system becoming more sustainable and flexible, with greater integrity.

This will enable current and future generations of Australians to continue to enjoy higher standards of living in retirement.

The Government will better target superannuation tax concessions to those who need them most and where they will be most effective in increasing self-sufficiency in retirement.

This infographic has two components.  The first is a person in a suit under a magnifying glass to signify that the Government is targeting tax avoidance.   The second shows an older couple holding hands to signify the Government is making the superannuation system more sustainable.