The RD Guide To The 2009 Australian Federal Budget

Treasurer Wayne Swan is scheduled to deliver the 2009 Federal Budget tonight, Tuesday 12th May, at 7.30PM. This will be one of the most significant budgets in recent history.

The world has been going through major financial turmoil, which for the most part Australia has managed to weather well. This budget may be the one that tightens things up.

Key points that Treasurer Swan is expected to cover tonight:

  • With the jobless rate up to around 7%, there is a $200 billion loss in tax revenue. This will mean that a lot of spending has to be cut.
  • It's expected that there will be at least a $58 Billion deficit announced.
  • Single pensioners are expected to see increases in their benefit payments;
  • New parents should see an increase in the length of paid parental leave they can take;
  • Means testing for the private health insurance rebate may be introduced;
  • There is debate about whether the federal first home owners boost will be scrapped or retained.

This will be an interesting budget, given the difficult economic environment.

Rate Detective will update this page as more information becomes available. We'll make sure that you know how the budget affects you. Keep checking back for updates.

OK, so Federal Budget is announced. How does it affect you - the ordinary Australian?

The federal budget at a glance:

National broadband network

The government has already made an initial deposit of $4.7 billion on the $43 billion national broadband network.

Significant steps have already been taken to launch the network since it was announced in April, including establishing the company that will oversee construction and launching a study of how it should operate. The company will invest $43 billion over 8 years to build the network in conjunction with private companies.

It is planned that the fibre-to the premises network will reach 90 per cent of Australian homes and businesses and deliver broadband speeds of up to 100 megabits per second. The national broadband network is regarded as a priority investment in infrastructure for Australia's future and is working to implement this initiative thoroughly and as quick as possible.

Negotiations have already started with the Tasmanian government to begin an early roll out of the network starting in July.

First Home Buyers Grant

The government has extended the first home buyers grant in full until October 1st.

From then it will be halved to $10,500 for existing homes, and $14,000 to new homes. The boost will end on December 31st, although the existing $7000 first home buyers grant will continue.

Green Electricity

The nation is about to change the way it makes electricity, with the building of new solar power plants and cleaner coal facilities to be built.
The federal government is going to spend billions of dollars "greening up" electricity and wants to lead the world in this field.

Climate Change

The climate change budget has been increased to $15 billion over nine years despite tough economic times. The budget has shown that the government plans to start emissions trading in 2011 and help households cut emissions through measures like free ceiling insulation.

Pension

The government has increased the pensionable age to 67 and has given pensioners an extra $32.49 per week for singles and $10.14 per week for couples.

Medicare

The government has changed the medicare rebate to the following:

  • From July next year, singles who earn between $75,000 and $90,000 will be slugged with an increased private health insurance bill due to a cut in the rebate to 20 per cent. The medicare surcharge will remain at 1 per cent.
  • For those earning between $90,000 and $120,000 a year the rebate will fall to 10 per cent with the surcharge at 1.25 per cent.
  • For those earning more than $120,000, you will receive no rebate at all with a surcharge of 1.5 per cent.

What do you think of the 2009 Australian Federal Budget? Leave a comment below to let us know.

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Published on May 5-th, 2009 in Insurance
Damon Rasheed is the CEO of Rate Detective, an Australian financial service comparison sites specialising in Life Insurance, Income Protection Insurance and home loans. Damon holds a Master's Degree in Economics from the University of Melbourne and has been involved in many start-up internet businesses.

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