Australia budget 2017: Treasurer implores banks to absorb tax

Australian Treasurer Scott Morrison talks to media as he arrives at Parliament House in Canberra, Australia, Tuesday, May 9, 2017.

"Accordingly, we are replacing these requirements with an annual foreign worker levy of $1200 or $1800 per worker per year on temporary work visas and a $3000 or $5000 one-off levy for those on a permanent skilled visa", Morrison said during his budget speech.

Prime Minister Malcolm Turnbull has warned Australia's big five banks not to lie to customers if they try and pass on the $6 billion levy proposed in the federal budget.

Treasurer Scott Morrison has announced first home buyers and older Australians will be able to use their superannuation to get tax breaks under a new housing affordability package.

The government has already announced it will bankroll the construction of a second airport in Sydney and billions of dollars are also expected to be committed to building an inland freight rail line between Melbourne and Brisbane.

The new, seemingly minute levy of 0.006 per cent levy will apply to certain key funding sources, which will affect only banks with debts of more than $100 billion.

"It's $8 billion. A tax increase which affects nearly every working Australian", he said.

To read this article in one of Houston's most-spoken languages, click on the button below. But he is trying to ease the sting of a tax rise by assuring voters the money will go directly to paying for health and the National Disability Insurance Scheme.

The center-left opposition Labor Party accused the conservative government of delivering a tax cut for millionaires and a tax hike for every working Australian.

"They still want their services, they still want downward pressure on the cost of living, they still want the budget to return to balance and that is our job and they elected us to do that job".

Early learning and childcare received a boost, with $2.5 billion more in funding, including the new system of fee subsidies.

A $1.2 billion skills fund to provide new apprenticeships will be paid for by a foreign worker levy.

The budget deficit has widened to $37.6 billion for 2016/17 from the $36.5 billion estimated in the mid-year update.

Revenue is expected to grow 7.8 percent next year to AU$444.4 billion ($326 billion), and the deficit to shrink to AU$29.4 billion ($21.6 billion).

Australia has outpaced many of its developed country peers since the global financial crisis, but steady economic growth has been challenged in recent years by the end of the mining investment boom.

It sees the unemployment rate at 5.75% in 2017-18, easing from a 13 month high of 5.9% now while it pegged the consumer price index (CPI) at 2%, climbing to 2.5% by 2020-21.

According to Deloitte, the theme of this new Budget is to "bury the ghosts of Budgets past" - an appropriate assessment of this new spending spree, as it's been playfully dubbed in the media and social networks as a "Labor Budget" delivered by a Coalition government.

"Are you going to turn around and say in a few years" time to parents of disabled kids, "sorry, there's no money in the till'?" he said on ABC radio.

Spending will be A$34.6 billion (S$35.8 billion) in 2017-18, with plans to lift spending to 2 per cent of gross domestic product by 2020-21.


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