Roundup: Australia to return to surplus by 2020-21 on back of responsible budget measures: treasurer

The Australian government on Tuesday handed down the federal budget for 2017-18, with Treasurer Scott Morrison describing the measures as "responsible" and ones which will bring Australia's budget back to surplus by 2020-21.

In the lead-up to budget night, the government said its main focus would be to put "downward pressure on the rising cost of living", and it has attempted to do so by raising taxes for banks and multinational businesses while actively trying to ease the nation's housing affordability crisis.

Big winners out of the announced measures include small businesses, jobseekers, those who require healthcare and first-home buyers, while large multinationals, the nation's "big five" banks and foreign investors will all be hit with tax increases to reduce the nation's current budget deficit of 29.4 billion Australian dollars (21.6 billion U.S. dollars).

Morrison said the government would achieve budget balance, and eventually surplus, by cutting spending, introducing new taxes which won't affect "everyday Australians" and by investing heavily in "good debt", major infrastructure projects which create "job and growth" such as a second Sydney airport, the Snowy Hydroelectric scheme 2.0 and an improved regional rail link.

"Our plan is to grow our economy, to guarantee the essentials, to reduce cost of living pressures, and ensure the government lives within its means," Morrison told Parliament on Tuesday.

"From 2018-19, the government will no longer be borrowing to pay for our everyday expenses.

"I can confirm tonight that the budget is projected to return to balance in 2021 and reminds and surplus over the medium term. The underlying cash balance will improve from a forecast deficit of 29.4 billion (21.6 billion dollars) in 2017-18 to a projected surplus of 7.4 billion (5.4 billion dollars) by 2020-21."

In order to do so, the Treasurer has said the government would be introducing a new, 0.06 percent levy on the nation's five "big banks" which will raise an estimated 6.2 billion dollars (4.56 billion dollars) over four years, while tougher measures will be introduced to ensure that multinational companies are paying their fair share of tax.

Morrison said the big banks would not pass-on the levy to their customers, calling for "greater accountability" in the sector, while he said multinationals had for too long been able to avoid paying their fair share of tax to the Australian government.

"The Australian Taxation Office (ATO) has already raised 2.9 billion Australian dollars (2.13 billion dollars) in tax liabilities this year, against a group of just seven large multinational companies, and expects to raise more than 4 billion Australian dollars (2.95 billion dollars) in total this financial year from large companies and multinationals," Morrison said.

"We are toughening the multinational anti-avoidance laws of this Government to extend the rules to structures involving foreign partnerships or trusts, and clamping down on aggressive structuring using hybrids."

Foreigners have also been deemed to be "losers" out of the budget papers, with a foreign worker levy to be introduced for Australian companies which turn to other nations to fill skilled worker shortages.

The levy will net the government up to 5,000 dollars (3,680 U.S. dollars) per worker, for an estimated total of 1.2 billion dollars (880 million dollars), with the money to be reinvested in training more skilled Australians for future job openings.

Foreign investors will also be hit, with Morrison declaring that foreign home owners will be restricted to being able to purchase a maximum of 50 percent of any new developments, while foreign investors who leave properties unoccupied or not "genuinely" available for rent for at least six months per year will be taxed 5,000 dollars (3,680 dollars) annually.

While the government has introduced a number of budget savings measures, everyday Australians will be eligible to receive tax breaks, including those who own small businesses and those who claim healthcare often.

First-home buyers are also a winner as a result of the government's budget measures, with those saving to buy their first property now able to "salary sacrifice" their deposit money into their superannuation account, allowing them to fast-track their saving by up to 30 percent.

Also, as foreshadowed in the lead-up to the budget, Australia's border security agencies will receive a 321 million dollar (240 million dollar) boost in funding, while university fees will be raised slightly and fee repayments will occur earlier for graduates.

Morrison said the budget was a reflection of the government's commitment to be "honest about our challenges and our opportunities", adding that it "does not indulge simplistic solutions to complex problems".

"This is a budget that makes the right choices for Australians who are working hard to secure their better days ahead for themselves and their families," he told the parliament. Endit