Australian Budget Analysis

This assignment provides a detailed analysis of the Australian federal budget, addressing various aspects of government spending and its impact on different sectors. It examines the top ten spending cuts and largest expenditure programs, analyzing the reasons behind changes in spending f...Read More

Running head: QUESTIONS
Questions
Name
Institution affiliation
Question 1
The top ten spending cuts as follows: National Disability Insurance Scheme Savings Fund
suffering a $2,186 million cut; Higher Education Reform - further consultation suffering a
$1,982 million cut; $1,424 million cut or Public Sector Transformation and the Efficiency
Dividend; $1,103 million cut for Jobs for Families Package - deferred implementation;
$1,152 million cut for Aged Care Provider Funding - further revision of the Aged Care
Funding Instrument; Medicare Benefits Schedule - pause indexation suffering a $925 million
cut; Asset Recycling Initiative - return of unallocated funds suffering a $854 million cut;
$494 million cut for Youth Employment Package - Work for the Dole – reform; Industry
Skills Fund – efficiencies suffering a $223 million cut and Job Commitment Bonus –
cessation suffering a $242 million cut ((Blumer, 2016).
Question 2
The top ten largest programs for expenditure are as follows: Revenue Assistance to the States
and Territories with $61,265 million; Income support for seniors with $45,374
million ;Medicare benefits taking $21,956 million ; Family tax benefit with $19,341;
Assistance to the States for public hospitals taking $17,912 million; $17,056 million was

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allocated to Income Support for People with Disability; Residential and flexible care with
$11,319 million; Pharmaceutical and pharmaceutical services taking $10,800 million; Non-
government schools - national support with $10,554 million and Job seeker income support
taking $10,458 million (Blumer, 2016).
Question 3
Assistance to States for public hospital expenditure ranks fifth with revenue assistance to the
State and Territories ranking first. Assistance to States for public hospital expenditure saw an
increase in spending due to the rise in demand for various programs in the medical services
and benefits and pharmaceuticals services and benefits. States also got assistance for public
hospitals sun functions (Australian Government, n.d.). Other reasons for the increase in
spending are an increase in the demand for health services as well as a rise in the population
many of which are aged and this keeps driving up health costs.
Question 4
The federal government injection of $18.6 billion in education over the next ten years takes
the largest portion of the budget’s spending. However, this injection comes with one specific
restriction, it is tied to improving the performance of students and will prevent states from
reducing their budget for education and cost-shifting (Balogh, 2017). This means that more
than twenty elite schools in certain states like New South Wales and Queensland will lose
money and other will have their funds frozen. But, public schools will win with these reforms
as their funding will increase. Eve primary school student will pay $10,953 yearly and
$13,764 for students in secondary school.
Question 5
The Australian economy so exposed to a China downturn because it is very depend on the
economic growth of China and any trouble with its economy could be disastrous for
Australia. This is because during the financial crisis a decade ago, China was the one that

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saved capitalism from the problems it created itself (Verrender, 2017). The Chinese economy
was the sole drive of global economic growth during that time which create a substantial raise
in debt and investment (Balogh, 2017). It has been very difficult to curb these excesses and
his has created a lot of problems such whether or not China’s economy will suffer a “hard
landing”. Even if this does not happen, a slight slow in the country’s economy would be
disastrous for Australia.
Question 6
Even though Australia’s debt has been going up ever since the global financial crisis, it is till
considerably low compared to most developed countries with advanced economies. The
majority of Australia industries are open to international competition and possess skilled
available workers which makes the country attractive to foreign investment. The
government’s withdrawal from most areas of the market has ensured that the competition in
various sectors like financial services has improved. In 2012, the country’s net debt to gross
domestic product ration was at 11.6% and was predicated to rise to 12.7% in 2013
(Carmignani, & White, 2013). In 2016 the country’s net debt was almost at $326 billion; this
is 19 percent of the gross domestic product.
Question 7
In the most recent budget university students are losers because the funding for Universities
was reduced by 2.8 billion for a 4 year period effective from 2018. Effective January 2018,
university students will face higher fees starting at 1.8% in next year which will be a total
increase of 7.8% percent by the time we reach 2021 (Etax, 2017). Depending on the course a
student is taking, he or she will pay an additional $1,000 to $3,600 for a course that last four
years. For instance for a four year nursing course next year, the fees will increase from
$26,550 to $27,800 with the government subsidies of $55,700 through the Commonwealth
Grants.

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Question 8
Small businesses are losers especially those who depend on foreign workers because they
will have to helping in raising $1.5 billion for the Skilling Australians Fund (Kainth, 2017).
There will be a yearly foreign worker levy of $1,200 or $1,800 per employees who are
looking for temporary work visas. Companies sponsoring permanent skilled workers will pay
will deal with a $3,000 or $5,000 one-off levy.
Question 9
Health will be a loser in the most recent budget due the fact that Medicare Levy will increase
from 2 percent to 2.5 percent which is an extra $8.2 billion over a period of four years which
will double the number of households affected. The extra funds will be put in the National
Disability Insurance Scheme (Massola, 2017). This increase, even if it is just by half a
percentage, will cause middle income workers, under the Coalition to carry the majority of
the burden compared to those who are under Labor. In other words, effective July 1 2019,
any Australian under Coalition earning $200,000 will have to 34.1 average tax rate but those
under Labor will paying 34.3 percent average tax rate.
Question 10
There are various things in the budget that are worth about $1.6 billion that are still not yet
made public. Further an approximate amount of $2 billion saving in 2019 is still nor disclosed
(Leslie, Donoughue, & Elvery, 2016). The government does not have a lot of time and must
announce these remaining items within ten days when the campaigns starts. When this is
done they might be some new losers and winners.
Question 11
The government is involved in healthcare for various reasons. The government is responsible
for purchasing and providing health care, ensure that the vulnerable populations have access
to quality care as well as minimize medical errors and improve patient safety. Other reasons

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why the government is involved in health include control of health care markets, support the
development of new health technologies and practices, regulate and monitor quality of care,
build a healthcare workforce as well as bring together health care decision makers as well as
other stakeholders within the health care system (PBS News Hour, 2013). To summarize, the
government is involved in end in health care to protect the interests of a society by ensure
that high quality health care is provided.
Question 12
The Australian federal government is expected to spend $464.26 billion in the next financial
year. There will be a decrease in the general public services due to specific discount rate that
were used in superannuation. Defense will see an increase in spending due to the funding that
will be needed to accomplish plans described in the 2016 defense white paper. Spending on
education will also increase to accomplish the Quality Schools policy (Australian
Government, n.d.). Spending the on health will also increase as well as social security and
welfare expenses. Housing and community amenities and transport and communication on
the other will experience a decline in expenses.
Question 13
Social security and welfare expenditure incorporates social security and compensation as well
as services to individuals the aged, people with disabilities, veterans, children and families as
well as the unemployed. Assistance given to the aged makes up the largest percentage of
social security and welfare expenditure with 39.4 percent and its divided in to two, income
support for seniors and residential and flexible care (Parliament of Australia, 2015).
Assistance for families with children comes second with 24.7 percent and its divided in three,
family tax benefit, child care fee assistance, and parents’ income support. Assistance to
people with disabilities comes next with 19.2 percent followed by assistance to the
unemployed and the sick with 7.4 percent.

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Question 14
In Australia, universal health care is provided by Medicare. The cause delivered by Medicare
is of high quality, affordable and easily accessible for Australians or any other person who
has permanent residency. A person under Medicare can be treated at a public hospital by an
appointed doctor. It is not possible to choose your doctor under Medicare or chose the time of
admission in the hospital. A person with private cover will have more choices regarding the
doctor and the time of admission (Private Health, n.d.). Since Medicare will cover 75 percent
of the Medicare Benefits Schedule (MBS) fee for related medical costs, the patient or private
insurer is responsible for the remaining 25 percent.
Question 15
Per person, the average health expenditure for Aboriginal and Torres Strait Islander in 2010-
2011 was approximately at $7,995 which was an increase compared to 2008-2009. In 2014
the health expenditure for Aboriginal and Torres Strait Islander was $468.9 billion which is
$43 449 per Aboriginal and Torres Strait Islander person (Commonwealth of Australia,
2014).
Question 16
The government gets its revenue many from sources. The number one largest federal revenue
source is Individual income tax. Individual income tax is responsible for more than 40
percent of the total federal revenue. Another source of income is payroll taxes which include
wages and profits that pay for social security (Australian Bureau of Statics, 2017). Corporate
income tax is the next source of federal revenue. Another source of revenue is federal excise
taxes which include taxes on a variety of goods and services such as gasoline, alcoholic
drinks, airline travel and cigarettes. The next source of federal revenue is estate and gift tax
which includes tax on assets like real estate, stocks or cash.
Question 17

QUESTIONS
General revenue assistance is a widespread category of payments that are made available to
States so that they can spend them in accordance with specific activities that are priority in
their budget. General revenue assistance include budget balancing assistance, national
compensation policy agreements and compensation payments (Australian Government, n.d.).
Specific Purpose Payments on the other hand are used in the achievement of important
national policy goals in areas that states might be managing. In other words, there are specific
conditions that states must meet in order to get access to specific purpose payments. These
areas include social security, education, health and housing and transport.
Question 18
NSPPs (National Specific Purpose Payments) are funding systems through which states are
supported by the commonwealth in order to enable them to develop services in crucial
sectors. Currently, there are three National Specific Purpose Payments that the
commonwealth use to make these payments; these include the national Skills and Workforce
Development, the National Affordable Housing and the National Disability Services
(Australian, Government Department of Finance, n.d.). It is required that states spend NPPs
in the concerned sectors.
Question 19
Regarding MBS, the Australian government has done an allocation of $33.8 million of new
retinal photography equipment that will be enhance the diagnosis process for patients who
suffer from diabetic retinopathy in rural as well as regional areas. Another $3 million will
kept for new debates on MRI scans for patients suffering from breast cancer (Scott, 2016).
Concerning the MBS and veterans’ benefits, the government included various things such as
the alliance of 57 skin service items, additional objects to test various number of allergens
simultaneously as well limiting the co-claiming of certain items for varicose treatment where
it is clinically appropriate.

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Question 20
A health care home is a home base responsible for coordinating complex care for individuals
who suffer from chronic and challenging conditions. Health care homes benefit patients in
many ways especial those who have several chronic illnesses. They reduce the burden
patients have to carry by coordinating their care leaving them with a clear mind that will
enable them to easily detect symptoms, keep track of appointments, medications and advice
from health care professionals (Australian, Government Department of Health, 2017). Health
care homes enhances the quality of care of care as they make it possible for patients and their
care team to develop a treatment plan that will enable patients to effectively manage their
conditioning.

QUESTIONS
References
Australian Government. (n.d.). Statement 5: Expenses and Net Capital Investment. Retrieved
from http://www.budget.gov.au/2016-17/content/bp1/html/bp1_bs5-01.htm
Australian Government. (n.d.). Statement 6: Expenses and Net Capital Investment. Retrieved
from http://www.budget.gov.au/2017-18/content/bp1/download/bp1_bs6.pdf
Australian Bureau of Statics. (2017). Taxation Key Figures. Retrieved from
http://www.abs.gov.au/ausstats/abs@.nsf/mf/5506.0
Australian Government. Part 3: General Revenue Assistance. Retrieved from
http://www.budget.gov.au/2011-12/content/bp3/html/bp3_04_part_3.htm
Australian, Government Department of Health. (2017). Health Care Homes: for consumers.
Retrieved from http://www.health.gov.au/internet/main/publishing.nsf/content/health-
care-homes
Australian, Government Department of Finance. (n.d.). Resource Management glossary -
national specific purpose payments. Retrieved from
http://www.finance.gov.au/resource-management/pgpa-glossary/national-specific-
purpose-payments/

QUESTIONS
Blumer, C. (2016). Budget 2016 cheat sheet: What you need to know. Retrieved from
http://www.abc.net.au/news/2016-05-03/budget-2016-cheat-sheet-charts/7359608
Balogh, S. (2017). Budget 2017: schools funds tied to outcomes. Retrieved from
http://www.theaustralian.com.au/budget-2017/budget-2017-schools-funds-tied-to-
outcomes/news-story/4d6c78a98b51af82c9ed5cf2f980e72e
Commonwealth of Australia. (2014). the 2014 Indigenous Expenditure Report. Retrieved
from https://www.pc.gov.au/research/ongoing/indigenous-expenditure-report/2014/
indigenous-expenditure-report-2014.pdf
Etax. (2017). 2017 Budget for Students: Winners and Losers. Retrieved from
https://www.etax.com.au/2017-budget-for-students/
Evershed, N. (2016). Your tax dollars: how is the government spending your money in the
2016 federal budget? Retrieved from
https://www.theguardian.com/australia-news/datablog/ng-interactive/2016/may/03/
your-tax-dollars-how-is-the-government-spending-your-money
Carmignani, F., & White, G. (2013). Fact Check: how strong is Australia’s economy?
Retrieved from https://theconversation.com/factcheck-how-strong-is-australias-
economy-16716
Kainth, S. (2017). Australian visas to cost more from 1 July 2017. Retrieved from
http://www.sbs.com.au/yourlanguage/punjabi/en/article/2017/05/10/australian-visas-
cost-more-1-july-2017
Leslie, T., Donoughue, P., & Elvery, S. Budget 2016: Winners and losers. Retrieved from
http://www.abc.net.au/news/2016-05-03/budget-2016-winners-losers/7338448
Massola, J. (2017). More household’s worse off under Coalition's Medicare levy rise.
Retrieved from http://www.margaretrivermail.com.au/story/4700830/more-
households-worse-off-under-coalitions-medicare-levy-rise/

QUESTIONS
Private Health. (n.d.). What is covered by Medicare? Retrieved from
http://www.privatehealth.gov.au/healthinsurance/whatiscovered/medicare.htm
Parliament of Australia. (2015). What counts as welfare spending? Retrieved from
http://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary
_Library/pubs/rp/rp1516/WelfareSpend
PBS News Hour. (2013). What role should the government play in the health care of its
citizens? Retrieved from http://www.pbs.org/newshour/bb/government_programs-
july-dec13-aca_11-28/
Scott, S. (2016). Budget 2016: Medicare Benefits Schedule overhauled, Government to reap
$50m in savings. Retrieved from http://www.abc.net.au/news/2016-05-03/budget-
2016-medicare-benefits-schedule-overhauled/7380580
Verrender, I. (2017). The trouble with the Chinese economy and what it means for Australia.
Retrieved from http://www.abc.net.au/news/2017-05-22/the-trouble-with-china-and-
what-it-means-for-australia/8545886