Budget 2009/2010 was a combination of big spending initiatives tempered by cut backs. While there are a few big-ticket revenue raising measures such as the changes to the superannuation contribution caps, the rest is ‘death by a thousand cuts’. There is a whole raft of changes under the banner “improving fairness and integrity in the tax system” that accountants and tax advisers will need to be across. There is also a general tightening across many areas, particularly for family tax benefits.

The winners were small business with an unexpected increase in the Investment Allowance, infrastructure development, first home owners, and pensioners. Paid parental leave was also on the agenda but is not set to be introduced until 2011.

The Budget produces an estimated underlying cash deficit of $57.6 billion.

Concessional superannuation caps reduced
Concessional contributions cap reduced to $25,000 per annum (indexed) from the 2009/2010 financial year. Transitional concessional contributions cap reduced to $50,000 per annum.

Investment Allowance increased to 50% for small business
Small businesses will now be able to claim an increased tax deduction of 50% (up from the 30% previously announced) of the cost of eligible assets acquired between 13 December 2008 and 31 December 2009, and installed by 31 December 2010.

A raft of integrity tax measures to be introduced
A raft of integrity measures including:

• Access to non-commercial business losses tightened
• Tightening the non-commercial loan rules in Division 7A
• TFN withholding arrangements extended to closely held trusts
• Foreign employment income taxed under new rules
• Employee Share Scheme concessions limited

Changes in structure for R&D concessions and tightening of the qualifying definition
Research & Development (R&D) Tax Concessions will be replaced with a new R&D Tax Credit.

Private health insurance rebate phased out at $120k
3 new tiers introduced:

• Tier 1 – 20% rebate for those on $75,000 (more than $150,000 for families). Increasing to 25% at 65 years of age, and to 30% at 70 years.
• Tier 2 – 10% rebate for those on $90,000 (more than $180,000 for families). Increasing to 15% at 65 years of age, and to 20% at 70 years.
• Tier 3 – No private health insurance rebate for those on more than $120,000 (more than $240,000 for families).

Paid parental leave but not until 1 Jan 2011
The government funded scheme will provide eligible parents with up to 18 weeks of leave at the Federal Minimum Wage. No super contributions from employers at this stage.

6 month extension to first Home Owner’s allowance
Extension to the allowance or ‘Boost’ as the Government call it for a further six months — including three months at the full rate, before stepping it down.

Date of effect: 2009/2010 financial year (grandfathering arrangements from 12 May 2009)

The concessional contributions cap will be reduced to $25,000 per annum (indexed) from the 2009/2010 financial year. The transitional concessional contributions cap (applicable to individuals aged 50 and over for the 2009/2010, 2010/2011 and 2011/2012 financial years) will be reduced to $50,000 per annum.

'Grandfathering' arrangements will apply to certain members with defined benefit interests as at 12 May 2009 whose notional taxed contributions would otherwise exceed the reduced cap. Similar arrangements were applied when the concessional contributions cap was first introduced.

The annual cap on non-concessional contributions is $150,000 per annum for the 2008/2009 financial year and will remain at that level in 2009/2010. In the future, the cap will be calculated as six times the level of the (indexed) concessional contributions cap.

See also the Minister for Superannuation’s announcement: Improving equity in retirement

As announced on 18 February 2009, the Government has halved the minimum payment amounts required to be made from an account based pension for 2008/2009. Minimum payments are determined by age and vary between 4% and 14% of the value of the pension account balance at 1 July each year. The measure reduced the need for account based pension holders to sell assets at a loss in order to meet the minimum payment requirement.

The Government has extended this drawdown relief to 2009/2010. The reduction in the minimum payment amounts applies to account based, allocated and market-linked (term allocated) pensions.

Also see the Minister for Superannuation’s announcement: Assistance for Self Funded Retirees .

The Government has announced that, in line with the Australia's Future Tax System Report, the age at which Australians can access their superannuation and the age at which they qualify for the Age Pension will be gradually increased to 67 years.

The transition to the higher Age Pension age will commence in July 2017, with the qualifying age increasing by six months every two years, to reach 67 on 1 July 2023. This timeline dovetails with the current process for increasing the female Age Pension age, which was increased from 63.5 on Budget night (12 May) to 65 years of age by July 2013. The current Age Pension age for men is 65.

Also see: Release of Australia’s Future Tax System Report into Retirement Incomes

Date of effect: 1 July 2009

The matching rate and maximum co-contribution that is payable on an individual's eligible personal non-concessional superannuation contributions will be reduced.

Under this measure, the matching rate will be:

• 100% for 2009/2010, 2010/2011 and 2011/2012, with a maximum co-contribution of $1,000, reduced by 3.333 cents for each dollar by which the person's total income exceeds the shade out threshold for receiving the full co-contribution;
• 125% for 2012/2013 and 2013/2014, with a maximum co-contribution of $1,250, reduced by 4.167 cents for each dollar of total income above the shade out threshold; and
• 50% from 2014/2015 onwards, with a maximum co-contribution of $1,500, reduced by 5 cents for each dollar of total income above the shade out threshold.

See also the Minister for Superannuation’s announcement: Improving equity in retirement

The Australian and New Zealand governments have agreed in principle to establish a scheme which would allow transfers of superannuation savings between certain Australian superannuation funds and New Zealand KiwiSaver funds. The final details of the scheme are currently being settled with New Zealand.

Date of effect: acquisition of assets by small business between 13 December 2008 and 31 December 2009

Small businesses will now be able to claim an increased tax deduction of 50% (up from the 30% previously announced) of the cost of eligible assets acquired between 13 December 2008 and 31 December 2009, and installed by 31 December 2010.

The expanded Investment Allowance is available to small businesses with a turnover of less than $2 million. All other businesses can continue to access the Investment Allowance at 30% for eligible assets contracted for prior to 30 June 2009 and 10% for eligible assets that they commit to investing in between 1 July 2009 and 31 December 2009.

Small businesses need to invest a minimum of $1,000 per asset to qualify for the Investment Allowance.

See also the Treasurer’s media release: Small Business Tax Break Boost

Research & Development (R&D) Tax Concessions will be replaced with a new R&D Tax Credit.

The R&D Tax Credit will consist of a 40% non-refundable tax credit and a 45% refundable tax credit for firms with a turnover of less than $20 million. The new refundable tax credit will not be subject to an expenditure cap. Government is also seeking to tighten the definition of R&D that is eligible for the new R&D Tax Credit. R&D expenditure undertaken in Australia by foreign owned firms will be eligible for the 40% non-refundable tax credit.

As an interim measure until the 1 July 2010 start date, the expenditure cap on eligible R&D that can be claimed under the existing R&D Tax Offset will be lifted from $1 million to $2 million with effect from 1 July 2009.

See also R&D Tax Credit to Boost Business Investment

Date of effect: 2009/2010 income year

The application of the rules on the use of non-commercial losses will be tightened for taxpayers with an adjusted taxable income over $250,000.

The Government is concerned that excess deductions from unprofitable business activities - that are really lifestyle choices or hobbies - are being used to reduce the salary and wage income of high income earners. As such, taxpayers with an adjusted taxable income of over $250,000 will instead have excess deductions quarantined to the business activity. The existing rules will continue to apply to taxpayers with an adjusted taxable income of $250,000 or less.

Taxpayers will still have the ability to apply to the Commissioner for relief from the rules if there are exceptional circumstances or because the nature of the activities means that a taxpayer is temporarily carrying on an uncommercial business but the activities they are undertaking are nonetheless independently assessed as commercially viable.

Date of effect: 1 July 2009

The non-commercial loan rules in Division 7A will be extended to include payments by way of a licence or right to use real property and chattels. This measure seeks to reduce the scope for private companies to allow their shareholders or associates to use company assets such as real estate, cars and boats for free, or at less than their arm's length value.

The measure seeks to provide greater equity in treatment between the shareholders of private companies on the one hand and employees more generally. In-kind benefits provided by employers to an employee are generally subject to fringe benefits tax.

Other technical amendments will be made to strengthen Division 7A, including to ensure that corporate limited partnerships cannot be used to circumvent its operation.

Date of effect: 2010/2011 income year

The tax file number withholding arrangements will be extended to include closely held trusts, including family trusts.

The measure is designed to ensure that assessable distributions to beneficiaries of closely held trusts align with the amounts included by these beneficiaries in their tax returns. The measure will not apply to income upon which tax is directly payable by the trustee of the trust, such as the income assessable to minors. Individuals who have tax withheld by trustees can claim a credit for that tax in their tax return.

Date of effect: 1 July 2009

Under new rules set to be introduced, foreign employment income will generally become taxable with taxpayers entitled to a foreign income tax offset for foreign tax paid on the foreign employment income.

Currently, certain foreign employment income earned by Australians working overseas for a continuous period of 91 days or more is exempt from income tax. The Government states that the original intent of the law was to relieve double taxation however, in practice they believe little foreign tax may actually be paid on the foreign income concerned.

The exemption will continue to apply to income earned as an aid worker, a charitable worker, under certain types of government employment or on projects that are in the national interest.

See also Better Targeting the Income Tax Exemption for Australians Working Overseas

Date of effect: After 7:30pm 12 May 2009 (budget night)

The Government will target employee share scheme concessions to employees with an adjusted taxable income of less than $60,000.

Currently, an employee can elect to be assessed on discounts provided on shares or rights in the income year the shares or rights are acquired. If no election is made, the discount (which includes gains on shares or rights) is taxed at a later time (such as when restrictions on the shares or rights are lifted). If an employee elects to be taxed upfront they receive a tax exemption of up to $1,000 on the discount.

The measure will remove the existing election and assess discounts provided on shares or rights in the income year the shares or rights are acquired. The Government believes that removing the tax deferral option will ensure that remuneration in the form of share discounts are taxed at an appropriate time and rate, and reduces tax avoidance opportunities.

The measure will also limit access to the upfront $1,000 concession to employees with an adjusted taxable income of less than $60,000.

See also Better Targeting the Employee Share Scheme Tax Concessions

Date of effect: 1 November 2008

The Government will provide a limited CGT roll-over for assets transferred between trusts that have the same beneficiaries with the same entitlements and no material discretionary elements (fixed trusts).

Typically, the transfer of assets from one trust to another would trigger a CGT taxing point.

Trustees of eligible trusts will be able to defer the CGT consequences of the asset transfer until the receiving trust subsequently deals with the asset. This will allow eligible trusts to restructure without immediate CGT consequences. The measure will be accompanied by appropriate integrity rules.

Date of effect: 1 July 2008

The Government has accepted recommendations made by the Board of Taxation to allow certain Australian managed investment trusts (MITs) to make an irrevocable election to apply the CGT regime as the primary code for taxing disposals of assets (primarily shares in a company, units in a unit trust and real property investments). This will ensure that the tax treatment of disposals of these assets is consistent with the tax treatment of disposals of similar assets by complying superannuation funds. The measure will contain appropriate integrity rules.

Eligible MITs will be required to make an irrevocable election in the first income year that commences on or after the 2008/2009 income year. This should increase access to the CGT discount for resident investors and the exemption for gains on non-taxable Australian property for non-resident investors. Currently, gains and losses on disposal of investments by MITs may be on capital or revenue account.

Revised date of effect: 2009/2010

The Government has deferred for 12 months the application of the income test for the entrepreneurs' tax offset (announced in the 2008/2009 Budget).

Date of effect: Royal Assent of amending legislation

The anti-tax-deferral (attribution) regimes which ensure that residents cannot accumulate income offshore and defer or avoid Australian tax will be reformed.

Previously recommended by the Board of Taxation, the Government intends to:

• modernise the controlled foreign company (CFC) provisions and rewrite them into the Income Tax Assessment Act 1997;
• repeal and replace the foreign investment fund (FIF) provisions with a specific narrowly defined anti-avoidance rule;
• repeal the deemed present entitlement rules; and
• amend the transferor trust rules to enhance their effectiveness and improve their integrity.

These changes are subject to consultation.

Date of effect: Royal Assent of amending legislation

Changes will be made to the taxation treatment of off-market share buy-backs.

Previously recommended by the Board of Taxation, the Government intends to:

• establish a self-executing specific provision to debit the franking account of a company that undertakes an off-market share buy-back to cancel the tax benefit of streaming imputation credits from non-resident to resident shareholders;
• deny notional losses to shareholders that participate in off-market share buy-backs conducted by listed companies;
• modify the income tax law to specify the basis for determining the capital/dividend split, extend the period of lodgement for a distribution statement for a company conducting an off-market share buy-back, and confirm that certain integrity rules do not apply to tender style off-market share buy-backs; and
• transfer the share buy-back provisions from the Income Tax Assessment Act 1936 to the Income Tax Assessment Act 1997.

The Government also endorses the Board recommendation that the Australian Taxation Office remove the '14% administrative cap' on the level of discount for off-market share buy-backs undertaken by listed companies.

When is wine and beer not wine and beer?

Date of effect: 1 July 2009

The tax definition of beer and wine will change to prevent beer and wine based products that mimic spirits to be taxed as spirits.

The definition of beer will be changed to ensure that beer has a certain level of bitterness, and to clarify that the addition of sugar, artificial sweeteners and spirits may result in the resultant product being taxed as a spirit based product.

The definition of grape wine products will be changed to exclude products that add the flavour of any alcoholic beverage, other than wine. Other changes to the definition of grape wine products will act to provide certainty as to the circumstances where alcohol can be added to a grape wine product.

GST and cross-border transport supplies

Date of effect: 1 July 2010

Structural amendments will be made to the GST law to reduce compliance costs for businesses involved in the domestic transport of exported and imported goods. No further details available.

Tax and individuals

Increase in Medicare levy low income threshold

Date of effect: 1 July 2008

The Medicare levy low-income thresholds will increase to $17,794 for individuals and $30,025 for individuals in families. The additional amount of threshold for each dependent child or student will also increase to $2,757. In addition, the Medicare levy threshold for pensioners below Age Pension age will increase to $25,299.

Private health insurance rebate phases out at $120k

Date of effect: 1 July 2010

Three new 'Private Health Insurance Incentive Tiers' will be introduced.

• Tier 1 - applies to singles with income of more than $75,000 (more than $150,000 for families), based on current projections. The private health insurance rebate will be 20%, increasing to 25% at 65 years of age, and to 30% at 70 years. The private health insurance surcharge for not taking out complying private health insurance will remain at 1%
• Tier 2 – applies to singles with income of more than $90,000 (more than $180,000 for families). The private health insurance rebate will be 10%, increasing to 15% at 65 years of age, and to 20% at 70 years. The surcharge for not taking out complying private health insurance will be increased to 1.25%
• Tier 3 – applies to singles with income of more than $120,000 (more than $240,000 for families). No private health insurance rebate will be provided. The surcharge for not taking out complying private health insurance will be increased to 1.5%

Existing arrangements will remain unchanged for singles with income of less than $75,000 per annum and families with incomes of less than $150,000 per annum. Income in this context refers to income for Medicare levy surcharge (the surcharge) purposes.

All income thresholds will continue to be indexed to wages. The income thresholds will also be adjusted for families with more than one child in the same manner as existing arrangements for the surcharge.

Date of effect: 2008/2009 income year

This measure ensures that unexpended income of a Special Disability Trust is taxed at the relevant beneficiary's personal income tax rates rather than automatically at the top personal tax rate plus Medicare Levy.

Date of effect: 2009/2010 income year

The Government will also extend the CGT main residence exemption to include a residence that is owned by a Special Disability Trust and used by the relevant beneficiary as their main residence.

Other tax changes and items

Date of effect: 2009/2010 income year

Triennial review of the guidelines for, and organisations on, the four deductible gift recipient registers will be introduced.

Repeal of unlimited amendment periods in the income tax laws

Date of effect: Royal Assent of the enabling legislation

The Government will repeal certain provisions within the tax law that provide unlimited amendment periods.

ATO cashed up to pursue non-compliance and debt

The ATO is cashed up and raring to go with $302.1 million over 4 years to pursue risks that could erode Australia’s revenue base, $70.9 million to ensure that small business meets its tax and super obligations, $100.1 million to work with small business and other taxpayers in financial distress, and $122 million to extend the work of Project Wickenby targeting tax fraud involving the use of offshore tax havens.

Previously announced tax measures

Further amendments to the small business concessions

Changes to the small business CGT concessions provisions extend the time for taxpayers to choose to access the concessions where the choice arises from changes to the concessions announced in the 2008-09 Budget and the 2008-09 Mid-Year Economic and Fiscal Outlook. This extension of time will apply from Royal Assent of the amending legislation.

Access to the concessions for assets acquired on the death of an individual will be extended to cover assets that have passed to a testamentary trust where the individual would have been able to access the concessions at the time of their death. This extension will apply to CGT events happening in the 2006/2007 income year and later income years.

The provisions which treat certain distributions to entities connected with a private company as dividends will be excluded from applying to the small business CGT retirement exemption. This exclusion will apply from Royal Assent of the amending legislation.

The measure was introduced into Parliament on 19 March 2009.

Cash flow relief for small business by reducing PAYG instalments for the 2009/2010 income year for all taxpayers who pay quarterly PAYG instalments based on their previous year's tax adjusted by GDP growth.

This measure was previously announced on 28 March 2009 by the Treasurer and Minister for Small Business (see $720 Million Cash-Flow Relief for Small Business )

The optional capital gains tax loss roll-over for complying superannuation fund mergers will be extended by one year to 30 June 2011.

The measure now also applies to mergers involving pooled superannuation trusts where the continuing entity has at least five members and to mergers involving the complying superannuation business of life insurance companies.

The measure permits merging superannuation entities in a net capital loss position to elect to roll over assets with accrued capital gains as well as assets with accrued capital losses.

In addition, the roll-over will be expanded to permit the transferring superannuation entity's previously realised net capital losses to be transferred to the continuing superannuation entity and the roll-over or transfer of revenue losses to the continuing entity.

The FBT laws will be amended to ensure that donations to deductible gift recipients made under salary sacrifice agreements do not result in an employer incurring an FBT liability. This measure was previously announced by the Assistant Treasurer on 24 February 2009.

Personal liability of liquidator for GST

As previously announced by the Assistant Treasurer on 6 February 2009, the Government will amend the GST law to ensure that liquidators are not personally liable for GST on a taxable supply made in the course of the liquidation. The amendments will also ensure that refunds are not available where the correct amount of GST has been paid in respect of transactions occurring during the period of the representative's appointment. The changes follow the decision in Deputy Commissioner of Taxation v PM Developments Pty Ltd.

Pensions, payments and benefits

Paid parental leave

Date of effect: 1 January 2011

A Paid Parental Leave scheme will be introduced from 1 January 2011.

The government funded scheme will provide eligible parents with up to 18 weeks of leave at the Federal Minimum Wage, currently $543.78 per week. These payments will be treated as taxable income and will affect entitlement to family assistance payments, but will not be counted as income for income support payments. People who elect not to receive Paid Parental Leave or who do not qualify will continue to receive the Baby Bonus and other family payments, where they meet eligibility requirements.

Primary carers will be eligible for the scheme if they:

• earned less than $150,000 in the full financial year prior to the birth or adoption of a child;
• have worked at least 330 hours over the 10 months preceding the birth or adoption of a child; and
• have also worked continuously with one or more employers for at least 10 of the 13 months before the expected date of birth or adoption.

In some cases Paid Parental Leave will be able to be transferred to another caregiver if the primary carer returns to work before they have received their full Paid Parental Leave entitlement.

Parents who choose to receive Paid Parental Leave will not receive the Baby Bonus, except in cases of multiple births where parents will not receive the Baby Bonus for the first child only. Parents who choose to receive Paid Parental Leave will also not be eligible for the Family Tax Benefit Part B and the dependent spouse, child-housekeeper and housekeeper tax offsets for the 18 week period or whilst they are in receipt of Paid Parental Leave.

The paid paternity leave component will be considered as part of the comprehensive review of the scheme which will take place in 2013.

Consideration of superannuation payments while on statutory Paid Parental Leave will also be deferred until the review. The Australian Taxation Office has advised the Government that it considers that salary paid while on parental leave and other ancillary leave payments are ordinary time earnings for superannuation guarantee purposes. The Government will clarify that superannuation guarantee contributions will not apply to voluntary paid parental leave payments, and the Government will review this position when it reviews the treatment of superannuation under the paid parental leave scheme. The Government will also defer the application of superannuation guarantee contributions for ancillary leave payments until this review is completed in 2013.

Date of effect: 1 July 2009

Family Tax Benefit Part A (FTB-A) payment rates will be indexed by the Consumer Price Index consistent with other family payments such as Family Tax Benefit Part B and the Baby Bonus. This will replace the current arrangement whereby maximum rates of FTB-A for children under the age of 16 are benchmarked to a proportion of the combined couple rate of pension payments, or adjusted by the CPI, whichever is higher.

The higher income thresholds for family payments will be maintained at their current level until July 2012.

The following higher income thresholds will remain fixed until July 2012: the Family Tax Benefit Part B primary earner income threshold, which will remain at $150,000; the income threshold for receiving the dependency tax offsets, which will remain at $150,000; the Baby Bonus eligibility threshold, which will remain at $75,000 of family income in the six months following the birth or adoption of a child (equivalent to $150,000 a year); and the higher income-free area of Family Tax Benefit Part A, which will remain at $94,316 of family income (plus $3,796 for each child after the first). These thresholds would ordinarily be indexed by the CPI.

Date of effect: 20 September 2009

A new pension package (comprising the base pension and the Pension Supplement) will deliver the following increases:

• a $32.49 per week increase for single pensioners on the full rate of pension; and
• a $10.14 per week (combined) increase for couple pensioners on the full rate of pension.

These increases will be provided in two forms, through an increase in the base rate of pension for singles; and through an increase in a new Pension Supplement for both singles and couples.

The Government will provide a $30 per week increase in the single basic pension rate.

For the new Pension Supplement, the Government will provide:

• a $2.49 per week increase for singles; and
• a $10.14 per week combined increase for couples.

The changes also consolidate a series of payments and provide for greater flexibility into how these benefits are paid.

See also the Treasurer’s media release Three million Australians benefit from pension reform

Date of effect: first payments made by 30 June 2009. Subsequent payments start 1 July 2010.

A new carer supplement will provide:

• $600 per annum to all Carer Allowance recipients for each person being cared for; and
• $600 per annum to all Carer Payment recipients.

People who receive both Carer Payment and Carer Allowance will be eligible for both payments.

The existing Child Disability Assistance Payment of $1,000 per annum for carers who are paid Carer Allowance (child) will continue.

The income test taper will increase from 40 to 50 cents in the dollar for a single pensioner and from 20 to 25 cents in the dollar for each member of a couple, for income above the relevant income free threshold. This threshold is currently $138 per fortnight for single pensioners and $240 per fortnight for pensioner couples (combined).

As part of this measure, the higher income test threshold for pensioners with children (currently $162.60) will be abolished to align the pension income test with the allowance and family payments income tests. This recognises that assistance with the care of children is provided directly through Family Tax Benefit and Child Care Benefit.

Existing part pensioners affected by the income test changes will keep existing entitlements, maintained in real terms, plus an increase of $10.14 per week for singles or couples combined. To increase incentives to undertake paid employment, an income test concession for employment income will be introduced for people of Age Pension age and for veterans of Service Pension age. Employment income will be assessed fortnightly, with only half of the first $500 of fortnightly employment income to be counted in assessing their pension entitlement.

Other items of interest

The Government will extend the first home owners Boost for six months.

For eligible first home buyers entering into contracts between 1 July 2009 and 30 September 2009 (inclusive) the First Home Owners Boost will continue to provide $7,000 for the purchase of established homes and $14,000 for the purchase of new homes. In combination with the existing $7,000 First Home Owners Scheme grant, this means that first home owners will receive a total of $14,000 for established homes and $21,000 for new homes.

For eligible first home buyers entering into contracts between 1 October 2009 and 31 December 2009 (inclusive) the First Home Owners Boost will provide $3,500 for the purchase of established homes and $7,000 for the purchase of new homes. When combined with the existing First Home Owners Scheme grant, this means that first home owners will receive a total of $10,500 for established homes and $14,000 for new homes.

Date of effect: grants funding delivered in June 2009

An additional $50 million has been provided for the Export Market Development Grants scheme in 2008/2009. Eligible exporters will now receive 100% of their eligible expenses. Additional funding was required to fill a gap after an extension of the eligibility requirements.

Also see: Export Market Development Grants - Extra $50 Million to Guarantee 100 Per Cent Payouts in 2008-09

The Government will make an initial investment of $4.7 billion towards an enhanced National Broadband Network.

The Government has established a company to build and operate a new National Broadband Network to deliver telephony and high speed broadband to Australian homes, schools and businesses. The preliminary estimate is that the enhanced National Broadband Network will cost up to $43 billion, with detailed engineering, commercial and structural requirements to be finalised through an implementation study to be completed by early 2010. Within the funding envelope, the Government's objective is to achieve 90% coverage using fibre to the premises technology, with remaining coverage to be achieved through wireless and satellite technologies.

The company has been established under corporations law and will operate as a government business enterprise. Private investment will be encouraged but ownership caps will be established to protect the Government's objective of establishing a wholesale-only open access network that is independent of retail providers. The Government intends to sell down its interest within five years after the network is built and fully operational.

The Government's initial investment includes $4.45 billion for an equity injection to the company that will build and operate the network and an investment in the early rollout of a fibre-based broadband network in Tasmania. The profile of these investments is expected to be $30.0 million in 2008/2009, $750.0 million in 2009/2010, and $3,670.0 million in 2010/2011.

A further $250.0 million in 2009/2010 will be invested to upgrade regional backbone blackspots.

The Government has committed to another big infrastructure spend of $22 including:

• $8.5 billion to expand Australia’s land transport networks – targeting roads, rail and ports. This includes:
  • $4.6 billion for improvements to metropolitan rail in Melbourne, Sydney, Brisbane, Perth, Adelaide and the Gold Coast;
  • $3.4 billion for improvements to the quality of Australia’s road networks, including Network 1 – Australia’s busiest freight route – stretching from Melbourne to Cairns; and
  • $389 million for developing, expanding and constructing critical port infrastructure in Western Australia and the Northern Territory.
• $4.5 billion in a Clean Energy initiative (including $1.0 billion in existing funding). Together with the existing Australian Solar Institute, National Low Emissions Coal Initiative and Cooperative Research Centre for Greenhouse Gas Technologies, the Clean Energy Initiative includes:
  • a $2.0 billion investment in carbon capture and storage projects under a Carbon Capture and Storage Flagships program;
  • a $1.5 billion Solar Flagships program to demonstrate large-scale solar technologies; and
  • $465 million seed funding for a new body – Renewables Australia – to support leading-edge renewable technology research and development.
• $2.6 billion from the Education Investment Fund in projects focussed on universities and research. Projects include the Queensland University of Technology Science and Technology Precinct and La Trobe University’s Rural Health School. This investment builds on the $14.7 billion long-term investment in Australian schools announced in February as part of the Nation Building and Jobs Plan.
• $3.2 billion from the Health and Hospitals Fund in hospital infrastructure, translational medical research infrastructure and a national cancer statement.

Date of effect: 2009/2010

The Government has decreased the number of places available under the Migration Program including 25,400 less skill stream places.

Date of effect: 2010/2011

ASIC fees and charges will be indexed to the consumer price index from 2010/2011.

Budget Speech - http://www.budget.gov.au/2009-10/content/speech/html/speech.htm

Budget 2009/2010 - http://www.budget.gov.au