Australian conservative government to raise taxes on five biggest banks

Start tightening the belt, because you're about to start feeling the pinch.

Despite boosted outlays, the Treasurer promised a $7.4 billion surplus in 2020-21 with no borrowing for recurrent spending, which cover the day-to-day bills from running the government.

The budget will be the first since PM Malcolm Turnbull's government was re-elected on a tiny majority previous year.

The government estimated the deficit for the current fiscal year ending June 30 will be AU$37.6 billion ($27.6 billion), AU$500 million ($367 million) worse than was forecast a year ago.

$216.6 million over four years cut from funding for aged care - a cut of around $1670 per resident per year.

All because numerous assumptions contained in the Budget Papers 2012-13 turned out overly optimistic (in hindsight) and some just plainly off the mark - such as: "Growth is expected to be driven by surging resources sector investment and growth in non-rural commodity exports" and "there is expected to be little contribution from.dwelling investment".

Australian Bankers' Association chief executive Anna Bligh said on budget night that the levy was introduced without any consultation with the banks.

A Medicare Guarantee Fund will be established to pay for all expenses of the Medicare Benefits Schedule and the Pharmaceutical Benefits Scheme (PBS).

It is expected that the new levy will raise up to $6.2 billion.

The government hopes to recoup costs by pushing the burden for university costs more onto students. The threshold has been dramatically dropped to $42,000 a year, down from $55,000.

Health An extra healthcare tax from 2019 will raise funding for a national scheme to support people with disabilities.

As for the levy on banks: "We're not going to stand in the way of it".

"They key will be how well this is executed", he said.

"So that's why we've made a decision to do something about it".

Spending to be frozen for two years from 2018, resulting in an effective A$303 million cut. "Banks will also be held to account if they try and hide misconduct by executives with new mandatory reporting requirements".

Until now investors could claim a tax deduction on travel costs when visiting a property they owned, while there has been no limit to the number of times an owner could visit each year.

Retirees came out of the Budget smiling, as retired couples who downgrade will now be able to put $300,000 each from the proceeds of the sale into their superannuation.

Throw in a promise to spend big on infrastructure, and, according to one Australian commentator, Mr Morrison didn't just steal the opposition's clothing - he took the whole wardrobe.

Infrastructure received a boost with the government injecting up to $5.3 billion into the new Western Sydney airport and $8.4 billion for the 1700km Melbourne to Brisbane inland rail project.

In a surprise move, the Turnbull Government will bring back a trial on drug testing welfare recipients.

"Skilled migration has always played a significant role in driving our economic growth".

A $1.2 billion skills fund to provide new apprenticeships will be paid for by a foreign worker levy. A $3000 or $5000 one-off levy will be available for those on a permanent skills visa.

The jobless rate is set to ease from 5.75 per cent this year to 5.25 per cent in 2020/21.

Among other losers were the nation's largest banks, which will face a new tax that will collect A$6.2 billion over the next four years.

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