Delivering the 2019-20 Federal Budget tonight, Federal Treasurer Josh Frydenberg said the Government has made real progress but there is still work to be done.
Off the bat, Frydenberg announced an expected surplus of $7.1 billion - the first surplus in a Federal Budget in 12 years. A total of $45 billion in surpluses over the next four years is estimated.
"Australia is back in the black and Australia is back on track," Frydenberg declared.
"For the first time in 12 years, we are paying our own way."
Australia is in a much stronger position than it was six years ago when the Liberal Party took power and inherited a $55 billion deficit - and while there are challenges - higher taxes are not the solution, he said.
In fact, more than 10 million tax payers will receive tax relief to the tune of $158 billion - the largest personal income tax cuts since the Howard Government.
The tax cuts will benefit those earning up to $126,000 a year. As a result, single income households will hold on to up to $1080 per annum, while dual income households will pocket $2160.
The cuts are effective from 1 July 2019 and the Government estimates about 4.5 million Australians will benefit in full.
The 32.5% tax rate will also be lowered to 30% from 1 July 2024, Frydenberg said. This covers those earning between $45,000 and $200,000, meaning 94% of taxpayers will benefit.
"Under the Morrison Government, tax as a share of the economy will not rise above the 23.9 per cent cap," he said.
Turning to superannuation, as announced yesterday, Australians aged 65 or 66 years who don't meet the work test will now be able to make voluntary contributions to super.
"We will also extend access to the bring-forward arrangements, which currently allow those aged less than 65 years to make three years' worth of non-concessional contributions, which are capped at $100,000 a year, to their super in a single year. This will now be extended to those aged 65 and 66," Frydenberg said.
The Government is also making permanent the current tax relief in place for merging super funds that is due to expire on 1 July 2020. This will ensure member balances are not hit with the tax consequences of the merger.
In regards to the Royal Commission, $606.7 million from 2018-19 will be used to facilitate the Government's response to the findings of the inquiry over five years. This includes the additional funding for ASIC and APRA outlined last week.
Included in that additional funding is $2.3 million over three years to ASIC for the resolution of outstanding Superannuation Complaints Tribunal matters and $0.1 million to explore the viability creating a Superannuation Consumer Advocate.
Self-managed super fund members will also benefit from changes to the way exempt current pension income is calculated, allowing those with members in both accumulation and decumulation to elect a preferred method of calculation.
The need to obtain an actuarial certificate when using the proportionate method has also been removed.
Small businesses such as financial advice practices and accounting firms will see taxes cut to 25%, as well as increased access to finance via a new $2 billion fund.
The instant asset write-off will also be increased from $25,000 to $30,000 and can now be used every time an asset under that amount is purchased. It has also been expanded to include businesses with turnover of up to $50 million.
"People running a small business put their livelihoods on the line. They start early and finish late. They manage the front desk and the back office. They pay their workers first and take their own wages last. We want small businesses to prosper, and we are backing them to do so," Frydenberg said.
Small and medium-sized businesses will also be able to capitalise on standing free trade agreements with China, Japan, Korea, the Trans-Pacific Partnership and Indonesia with $60 million in Export Market Development Grants announced.
On the back of the Royal Commission, older Australians will benefit from $725 million in additional funding for aged care, including 10,000 new home care packages and greater financial support for residential care.
A provision of $84 million will allow for carers of loved ones to leave family members in "safe hands and get a much needed break" and $500 million will go towards a Royal Commission into the mistreatment of people with a disability.
An extra $100 billion over 10 years has been committed to infrastructure projects, including an additional $3 billion to the Urban Congestion Fund and a $500 million Commuter Car Park Fund.
A further $2 billion will go towards development of a fast-rail between Melbourne and Geelong. About $1.4 billion will go towards Snowy 2.0; $2.2 billion for safer roads; $1 billion for freight routes and port access; and $100 million for regional airports.
Drought support to the tune of $6.3 billion will be provided by way of an extended Farm Household Allowance, while $3.3 billion will go to those affected by flood through the establishment of the Future Drought Fund.
Additional measures include a $9 billion investment in science, research and technology; $400 million for genomics research; $80 billion on healthcare; $160 million to improve the health of Indigenous Australians; $300 billion for schools; $453 million to pre-school education; and $328 million to women's safety.
The Government has also committed $461 million to youth mental health and suicide prevention support program, headspace.
"Six years ago when we came to government the economy was weakening, unemployment was rising and the Budget was deteriorating," Frydenberg said.
"Since then, we have made the right choices, the difficult but necessary choices and our economic plan is working. Tonight marks the next stage in that plan.
"Lower taxes for 10 million Australians and three million small businesses."
Prime Minister Scott Morrison is expected to announce an election in the coming days, slated for mid-May.