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Australia treasurer promises fair budget that reins in debt

budget-2017/budget-2017-live-reaction-and-analysis/news-story/84954a60f491a0b3379d9c52d746ca65">The Australian budget delivered last night is about tax increases, new levies and big spending in education, health and infrastructure.

Mr Morrison warned the banks not to put up fees to cope with this new tax during an address at the National Press Club in Canberra on Wednesday.

"As the transition progresses, jobs are continuing to be created in the services and construction sectors", Mr Morrison said.

Now the nation's top five banks - the Commonwealth, NAB, Wespac, ANZ and Macquarie - will be hit with a 0.06 per cent bank levy on their deposits, starting from July 1 this year. And the banks are threatening to choose customers.

"The cost of any new tax is ultimately borne by shareholders, borrowers, depositors, and employees", Westpac chief Brian Hartzer said.

So, the cyclical considerations are that if we have not seen enough tightening to end the boom then the banks should hike rates ASAP.

"This levy is a stealth tax on their life savings, the shares in their superannuation accounts, and it will make Australia's banks less competitive", he says.

What else was in the budget?

It also announced 8.4 billion Australian dollars for an inland freight rail line connecting Melbourne and Brisbane, along with billions more for other road and rail projects.

He also lowered the salary threshold for university debt repayments from A$55,000 to A$42,000.

Taxpayers are likely to be most affected by the half a percentage point increase on the healthcare levy in order to pay for the controversial National Disability Insurance Scheme (NDIS).

The budget involved a textbook manoeuvre by Mr Morrison - disarm your opponents by grabbing some of their ideas. Labor would cap the management of tax affairs at $3000.

In reality, this was more about steering to centre ground rather than swerving to the left.

"The tone of the budget, if not quite warm and cuddly, was certainly optimistic with plenty of assurances to the punters that the government understands (everyday Australian) problems", Oakes told the Nine Network.

"The measures may have an impact on home prices over time if they incentivize states to ramp up supply, but it's likely to be marginal in the short term", Shane Oliver, head of investment strategy at AMP Capital Investors in Sydney, wrote in a report.

Extra healthcare benefits for indigenous Australians who were exposed to radiation from British nuclear testing.

The Treasurer was unrepentant when speaking about the new tax, which he admits will be used for budget fix after he was forced to dump more than $13 billion of "zombie" savings measures from the 2014 federal budget that had failed to pass the parliament.

Straight off the mark she asked the tough questions, starting with the big one on many people's lips - "Could you be the first Liberal Treasurer in history to deliver a Labor budget?"

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