Joe Hockey’s first budget has Australians sweating about its effect on them. Source: Supplied
THERE are fears Joe Hockey will hand down a ‘horror Budget’ of tax rises and welfare cuts in tonight’s Budget.
With Mr Hockey himself pledging that every Australian will have to pay their dues, news.com.au readers tell us what they want to hear... and what they don’t want to hear... from the Treasurer tonight:
Rebecca Jenkins, 24, law student and HR manager at Clickview
Rebecca Jenkins: University student and young professional. Picture: Supplied Source: NewsComAu
Her big beef is with a potential hike in university fees which was floated by the Government’s Commission of Audit. It recommended university graduates pay back 55 per cent of their higher education costs, up from the current level of 41 per cent.
“I think (they are) a disincentive for people seeking further education, particularly since the Government has had such a massive impact in fostering postgraduate degrees,” she said.
In November 2013, Treasurer Joe Hockey scrapped a Labor government plan to place a $2000 cap on the amount people can claim off their tax for self-education expenses.
“They stopped that, and the message that sent was ‘we’re going to promote further learning and people should always be studying’,” Ms Jenkins said.
“So the cuts they’re planning on proposing is pretty much a direct contradiction of that. ‘Let’s make it a disincentive, let’s impede further on your education’.”
Ms Jenkins said she understood why the Government was proposing a tough budget including measures such as the debt tax, but thought Mr Hockey may be going too far.
“Any responsible government needs to find ways to try and put ourselves into surplus.
“I think we’re just being way too ambitious with it. I’m intrinsically against penalising unique groups of individuals for a sort of short term gain.”
However, she was optimistic about the economy. “I think the Australian economy’s actually performing a lot better than people think. But I think people expect a high standard of living which has a high cost.”
Toby Bensimon, 34, young professional with no children
Working hard: Toby Bensimon in his company’s store in Adelaide. Picture: The Advertiser Source: News Limited
Mr Bensimon has worked in his family’s jewellery business in Adelaide since he was 13, recently rising to become the managing director of Shiels Jewellers.
He was more concerned about the impact tax measures would have on his business than his personal financial situation.
The proposed deficit tax was a concern, although it remained unclear at which income level it would kick in.
“I run a business and our customers come from both spectra of the (financial) divide and if our customers are going to be hit with a tax that obviously affects our business,” he said.
Shiels has physical stores in three states and he said any increase in the fuel excise would hurt its logistics arm.
“It would be a cost,” he said. “Our online sales are a significant part of our business.”
Mr Bensimon said Liberal governments were usually sympathetic to reducing government interference in business. But that may have changed.
“I think the less contact we have with the government the better … This government, really the (Liberal) party itself, is generally sympathetic to that idea.
“But they’re just not demonstrating that with the Budget, at least in the rumours.”
The big question was whether the government would break its ‘no new taxes’ election promise.
“I’m just wondering if that does happen if it does go against the mandate they had and flies in the face of what was promised,” he said.
The Gordon family of seven
Seven in all: The Gordon family. Picture: Virginia Knight. Source: NewsComAu
A family of seven on a single income, the Gordons of Baulkham Hills in Sydney are already avid budgeters, with every dollar in the family ledger accounted for.
With five children under nine years, the family survives on dad Chris’ pre-tax base salary of $90,000.
But because Mr Gordon works for a charity, he receives tax concessions in the form of salary sacrifices, which, in addition to roughly $20,000 in government support, boosts the family’s coffers to $120,000 annually.
Even still, Mr Gordon has had to take on a second job to make ends meet.
Mum Rosina Gordon found it almost impossible to go to work with the logistics of organising the lives of so many little people who all needed to be dropped off and picked up in different directions.
She told news.com.au the only way she could have managed it is with a nanny or au pair but she said she wouldn’t have gotten paid enough to cover the cost.
Three of her kids were in private school after an incident at a public school persuaded her to switch.
But the children’s grandparents were covering two-thirds of the cost of tuition.
If the federal budget turned out to be the nightmare scenario many feared it would be, she was considering homeschooling her children.
Like many big families on limited means in a capital city, after the mortgage payments and bills, there was not much money left over for everything else.
The Gordons have had to go without luxuries such as dining out, amusement parks or holidays.
“We shop once a fortnight at Aldi,” Ms Gordon said. “I buy most things at the supermarket, including clothes. We eat of lot of chuck steak and I’ve just negotiated more money off my electricity and insurance.
“I’ve had to go through everything with a fine-tooth comb and tried to get it all down further. In some cases there was a little bit of fat we could get rid of, and we did.”
The main budget proposal Ms Gordon was worried about was the scrapping of Family Tax Benefit B, worth $3600 a year to the Sydney family.
An increase in the petrol excise would also hit the Gordons hard. Ms Gordon said: “We budget things like fuel and we’re careful about driving places. Our son catches the bus to school because we can’t afford the school runs. (The fuel excise) hits people in the west the hardest because we have less public transport. And with young children, we’re more likely to be driving.”
For Ms Gordon, family government support was created not to give people hand-outs but to introduce fairness to the tax system.
“I think the biggest issue is the ageing population and everyone has been talking about the escalating cost of pensions,” she said.
“I think we have to be careful to not penalise large families.
“The government told people to have more children; that it was in the national interest. Throwing more money at childcare is not the answer. My husband’s income shouldn’t go towards my neighbour’s childcare benefits, it should be means tested.
“In the future, we’re going to need more taxpayers and large families are trying to address that problem.
“We’re trying to raise stable children who are going to make a contribution to our country.”
Ben McCombe, 34, mature age university student
Career-change: Ben McCombe. Picture: Supplied Source: NewsComAu
Mr McCombe, who is in the midst of a career change, is studying an Arts degree at Melbourne University.
His biggest concern about any changes to the university system was with how much assistance the Government would provide to ensure kids qualified for tertiary education.
“I don’t think fees are the main driver in stopping poor students from going to university,” he said. “The most important thing there is inequity in the school system.”
“I grew up in the country and I went to a Catholic high school. It wasn’t like a really fantastic well-resourced school.
“I think that’s the biggest inequity in tertiary entrance. If you go to a really good school, you’ve got a really good chance of getting in. If you’re going to a poorer school you don’t.”
The Abbott government caused controversy late last year when it appeared to back away from its Gonski school funding election promise.
Mr McCombe also believed the proposed Medicare copayment would be damaging. Many Australians already could not afford to visit a doctor, he said.
And he was not convinced the government’s harsh measures were necessary. “I don’t buy the budget emergency thing. We have a structural deficit of $30 billion a year.”
“That’s a problem we need to fix — not something we need to fix right away. The cuts aren’t necessary in the short term.”
Saxon Wright, small business owner
Coffee king: Saxon Wright. Picture: Supplied Source: Supplied
Pablo and Rusty’s managing director Saxon Wright employs around 100 staff at four cafés across Sydney and sells coffee beans wholesale throughout New South Wales.
He was not overly worried about what the Budget would deliver but was disappointed at the “lack of openness and transparency” from the government and was unsure how it would impact his business.
“It seems like there are lots of changes happening and opinion about it. I’m still unsure what the impact will be.
“It doesn’t seem clear exactly what it’s going to mean for the small and medium sector.”
Mr Wright said most of his customers had adopted a ‘wait-and-see’ approach, but he was aware extra taxes and cuts to welfare could impact the consumer sector.
“If everything goes through then I suspect people will have a more cautious approach to how they spend in the consumer sector which is where we sit. Having said that, the coffee sector was fairly robust through the GFC so amid the crisis people are happy to buy a coffee so that’s encouraging.”
Overall, Mr Wright hopes the Budget restores a sense of balance to the economy, however he said large government spending in areas like defence did not fill him with confidence.
“It doesn’t seem calibrated with what’s happening now and taking long-term measures step by step. The steps seem too big and lurchy, the economy is going to swing in different directions and that brings a lot of instability.”
From a business perspective, he was hoping for a budget that encouraged banks to lend so he could get access to as much finance as possible, but said major changes so close to D-day worried him.
“It doesn’t give me confidence they’ve made firm decisions. It seems so close to the budget and they’re swinging between major issues. The fact it’s not clear and not sure, it’s like ‘do you guys know what you’re doing?’”
Margaret Erneste, 71, semiretired
Part-time worker: Western Australia’s Margaret Erneste. Picture: Supplied Source: NewsComAu
Mrs Erneste is a part-time worker who does not claim the pension. But she said the pension age was one issue many seniors are worried about.
“I think the thing that is bothering a lot of seniors is raising the retirement age,” she told news.com.au.
“If like me, you are still working then that’s fine but if you lose your job at 50-plus you haven’t a hope of being employed again.
“I think (a retirement age) of 67 years old is fair, people just get so tired.”
Mrs Erneste said she was also concerned about co-payments for doctor visits.
If some people had to pay $5 or $6 that would be no problem but having spoken to friends who were doctors, she had been told this would be difficult to administer and patients would probably be forced to pay the full fee and then claim back the gap from Medicare. Having to pay about $45 upfront would be difficult for many people, she said.
She was also worried about any substantial increases to the costs of medication on the Pharmaceutical Benefits Scheme.
“A lot of seniors are on a lot of medication, 6 or 7 at a time, if you raise prices a lot, this will make it difficult for people to afford them.”
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