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2015-16 FEDERAL BUDGET BRIEF
MAY 2015
[Word cloud generated based on the Treasurer’s Budget Speech]

2. 2015-16 FEDERAL BUDGET PAGE | 2
OVERVIEW
The Abbott Government’s second Budget has estimated the final outcome of the 2014-15 Budget will be a deficit of $41.1
billion (compared with the original forecast deficit of $45.1 billion), with a deficit of $35.1 billion forecast for 2015-16. On
current Government policy settings, the Budget is forecast to be in deficit until at least 2018-19 and net federal debt is
predicted to peak at 18.0 per cent of GDP in 2016-17 before trending down.
KEY ECONOMIC INDICATORS
The Budget forecasts that in the 2015-16 financial year the Australian economy will grow by 2.75 per cent, with inflation of 2.5
per cent and an unemployment rate of 6.5 per cent.
-4.5%
-4.0%
-3.5%
-3.0%
-2.5%
-2.0%
-1.5%
-1.0%
-0.5%
0.0%
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15(est)
2015-16(est)
2016-17(est)
2017-18(proj)
2018-19(proj)
%GDP
Fiscal balance
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15(est)
2015-16(est)
2016-17(est)
2017-18(proj)
2018-19(proj)
%GDP
Net federal debt

3. 2015-16 FEDERAL BUDGET PAGE | 3
REVENUE
Total tax receipts in the next financial year will increase by 5 per cent, even with the reduction in company tax. The key
contributor to the revenue increase will be individual income tax.
actual estimate Budget
2013-14 2014-15 2015-16
million million million % change
Individual Income Tax 163,592 176,600 189,600 7%
FBT 4,077 4,350 4,880 12%
Company Tax 67,273 68,000 68,200 0%
Superannuation Tax 6,101 6,140 9,080 48%
PRRT 1,368 1,800 1,450 -19%
MRRT 143 60 0
GST 51,394 54,285 57,316 6%
WET 766 780 820 5%
LCT 464 500 450 -10%
Excise 32,299 31,270 32,800 5%
Customs 3,022 2,530 1,500 -41%
Carbon pricing 4,363 1,630 0
Other taxes 3,507 3,508 4,045 15%
Total 338,369 351,453 370,141 5%
Individual
Income Tax
51.2%
FBT
1.3%Company
Tax
18.4%
Superannuation Tax
2.5%
PRRT
0.4%
GST
15.5%
WET
0.2%
LCT
0.1%
Excise
8.9%
Customs
0.4%
Other taxes
1.1%
Taxation

4. 2015-16 FEDERAL BUDGET PAGE | 4
Key tax measures
 Company tax rates for small businesses with a turnover of less than $2million will be reduced from 30% to 28.5%.
Unincorporated small businesses will have tax reduction of up to 5 percent, capped at $1,000
 Small business will also be able to access accelerated depreciation, with immediate tax deductions for capital
equipment with a value of less than $20,000. Any assets over $20,000 can be added together (‘pooled’) and
depreciated at the same rate. These assets are depreciated at 15 per cent in the first income year, and 30 per
cent per year thereafter
 A Multinational Anti-Avoidance Law and increased penalties for tax avoidance by large companies
 Working with businesses on a code for the disclosure of the tax affairs of companies operating in Australia
 Imposing GST on digital products and services imported by consumers from 1 July 2017
 Capping the FBT benefits exemption at not-for-profit organisations at $5,000 per employee per year.
EXPENDITURE
Overview
The most significant single component of Federal Government spending relates to social security/welfare, accounting for over
one-third (35 per cent) of all Federal Government expenditure (across the aged, families, disabilities, veterans, carers and
unemployed). A further one-sixth (16 per cent) of total Federal Government spending arises directly from health-related
expenditure. These two areas alone account for over half of the Federal Government’s total spending.
Infrastructure
The Government has committed $50 billion for transport infrastructure to 2020. This includes $3 billion still on offer for the
East-West Link, but with a clawback of $1.5 billion from the Victorian Government on the basis of the cancellation of the
project.
The Asset Recycling Fund, which has agreements with New South Wales and the Australian Capital Territory is estimated to
generate more than $15 billion of additional infrastructure activity.
Social
Security &
Welfare
36%
Health
16%
Education
7%
Other
purposes
20%
Defence
6%
General
Public
Services
5%
Other
Economic
Affairs
2%
Other
Government
Activities
8%
Expenditure

5. 2015-16 FEDERAL BUDGET PAGE | 5
Northern Australia Infrastructure Facility
The Government will establish a new $5 billion Northern Australia Infrastructure Facility that will be available for major
infrastructure projects such as ports, railways, pipelines and electricity generation.
Health
The Government still intends to establish a $20 billion Medical Research Fund by 2019-20, despite the absence of the
Medicare co-payment proposed in the 2014 Budget that was intended to fund it.
Retirement incomes
Rules will be tightened for pension eligibility, based on significant assets other than the family home. There will be no
changes to the superannuation arrangements.
White Papers
The Government has two White Papers to be completed by the end of 2015.
 The Reform of the Federation
 Reform of Australia’s Tax System
The two White Papers are clearly related and will consider the tax and expenditure responsibilities of the different levels of
government in Australia in the context of the tax system.
COMMENT
The 2015 Budget has less ambitious fiscal consolidation goals than the 2014 Budget; the return to surplus has been deferred
until at least 2019-20, after a decade of deficits.
The major winners in the 2015 Budget are small businesses with a turnover of less than $2 million that will have the benefit of
tax cuts for (incorporated and unincorporated businesses) and access to accelerated depreciation on capital equipment
valued at less than $20,000.
The imposition of GST on digital purchases from 1 July 2017 may be a precursor to similar GST integrity measures for the
$1,000 GST import threshold.
The Government is acting earlier than the OECD in respect of taxing global businesses with activities in Australia. In the
absence of a broader OECD agreement, this may create international competition for the tax revenues of some of these
businesses.
Disputes with State Governments will continue, particularly with respect to education funding beyond 2018-19 (the ‘Gonski
funding’). The clawback of $1.5 billion from the Victorian Government over the cancellation of the East West Link project will
also continue to strain relations between the Federal and Victorian Governments.
Many potentially contentious revenue measures that were rumoured in pre-Budget speculation (such as possible changes to
the taxation of alcohol) have been transferred into the Tax White Paper process.

6. 2015-16 FEDERAL BUDGET PAGE | 6
WHAT DOES THE BUDGET MEAN FOR YOUR ORGANISATION?
Possible questions your organisation may wish to consider in respect of specific Budget measures:
Revenue measures
 Does the Budget provide sufficient clarity about measures that affect your organisation?
 How will the proposed measures be implemented and when is it proposed that they will take effect?
 Will there be a transition period? Is the measure in any way retrospective?
 Are existing arrangements protected?
 Will there be a consultation process on implementation of the measure? How can you have input?
 Are various measures likely to pass the Senate?
 Do you have issues that should be raised in the Tax White Paper process (submission deadline 1 June 2015)?
Expenditure proposals
 Does the Budget announcement provide sufficient information? If not, how and when is it likely to become
available?
 What is the timing for the proposed expenditure?
 Does the proposed expenditure have the support of the Opposition? Would it survive a change of Government in
2016?
 Are there offsetting expenditure reductions or revenue measures in your sector intended to fund the proposal?