Tomorrow's Federal Budget is being trumpeted as one of the most important Government packages in 75 years, but let's face it — not everyone gets excited about underlying cash balances, fiscal strategies and the iron ore price.
But given the once-in-90-years recession and once-in-100-years pandemic we find ourselves in, this budget promises to be particularly relevant to your every day life, and there's no better time to learn the budget basics.
Read on to get up to speed, ahead of tomorrow's main event.
What is the Federal Budget?
Every year the Government spends hundreds of billions of dollars to keep itself, and the country, running.
This money ranges from welfare payments and supports, like JobSeeker and Youth Allowance, to Government-managed programs and the funding of Medicare, schools, the military and new projects like roads and infrastructure.
So it goes without saying, it has to account for that money somehow.
Every 12 months or so the Government has to allocate the money it collects into spending programs, and determine the rate at which it will collect revenue via taxes.
It does that in the Federal Budget.
The Budget's often the platform through which major policy changes, like tax cuts and new initiatives, are announced.
It also includes an economic outlook — a detailed analysis of the overall spending and income of the Government, showing whether the Budget is in deficit (it spent more than it collected) or surplus (it collected more than it spent).
The deficit or surplus has an impact on Australia's debt, which is the total amount of money the Government owes to creditors.
The Budget doesn't just outline the financial year it's produced for, it also forecasts the coming four years of spending and revenue.
Why is it important?
The Budget provides a chance for the Government to set out its priorities, and explain how it wants to achieve them.
Changes that affect you, like new taxes, payments and government concessions are often announced in budgets.
But the Budget doesn't just affect individuals.
It gives the Government a chance to influence the entire economy by changing its policies.
Ultimately, if you've paid any taxes, levies or fees to the Federal Government, it's your chance to see where your money will go.
Similarly, if you've received any benefit or support payment, it's your chance to see whether those will be affected.
When is the Budget handed down?
The Federal Budget is usually handed down on the second Tuesday in May.
Well May was months ago, why are we talking about it in October?
Cast your mind back to May of this year, and you'll remember it was a pretty uncertain time.
Most of the world would have had trouble forecasting what would happen in the next fortnight, let alone over the forward estimates period (that's a Budget-y way of saying the next four financial years).
Because of that, the Government delayed the full Federal Budget until tomorrow, to allow the global situation to stabilise, even if only a bit.
We did get an earlier update on the nation's finances in July, which revealed the biggest budget deficit in modern Australian history.
That was before the Victorian outbreak put further pressure on the economy, and increased demand for support like JobKeeper, meaning the numbers revealed in the full budget are likely to be even worse.
What should I look for?
If you're interested in taking a deeper dive, the Budget comes in several volumes, or "budget papers", printed over hundreds of pages.
Budget Paper #1 gives a brief (only 10 chapters!) overview of the budget strategy, and has key breakdowns like the underlying cash balance (that's whether the budget is in deficit or surplus), the debt, and the Government's assessment of how the economy's tracking.
If you're looking for how much money is being spent on specific measures, you'll find that in Budget Paper #2, which breaks down where the Government expects its money to come from, and the spending initiatives it expects to fund.
That's also where you'll find any new announcements.
All of those measures are spaced out over the forward estimates, with tables showing how much money is spent or collected each financial year.
The spending and revenue measures are helpfully broken down by department, which means you don't have to wade through Health to get to Home Affairs.
Other papers that are released detail federal financial relations — including how much money will be distributed to the states as GST revenue — and the funding of the public service.
Or, if that all sounds like a lot (trust us, it is), we'll be bringing you all the key details on budget night.
See you then!
https://news.google.com/__i/rss/rd/articles/CBMiT2h0dHBzOi8vd3d3LmFiYy5uZXQuYXUvbmV3cy8yMDIwLTEwLTA1L2ZlZGVyYWwtYnVkZ2V0LWJhc2ljcy1leHBsYWluZWQvMTI1OTAzNDLSASdodHRwczovL2FtcC5hYmMubmV0LmF1L2FydGljbGUvMTI1OTAzNDI?oc=5
2020-10-04 18:47:00Z
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