Mid-Year Economic and Fiscal Outlook (MYEFO) 2015-16

The statement addresses the deteriorating budget deficit drivers, and the impact of measures implemented or announced since the budget in May 2015, including a number of significant adjustments to welfare.

The impact of slowing revenues (the iron ore price) and modified growth forecasts over the current and next three financial years have the government forecasting an increase over the May Budget deficit by $26 billion to reach $37.4 billion.

The return to surplus is now projected to be in 2020-21, a year later than previously forecast.

The government has outlined budget savings of $1.3bn from measures to reduce welfare fraud and means testing the Child Care subsidy, $650 million from a reduction of bulk billing for pathology and other services, and $534 million from changes to aged care funding.

Offsetting spending measures absorbed in the numbers include the $1.1bn innovation statement package, $403 million for asylum seekers waiting for processing in Australia, $909 million for 12,000 Syrian refugees processing, $621 million for pharmaceutical benefits, and roads funding of $300 million.

Single Touch Payroll

In other measures, the mandatory introduction of Single Touch Payroll for employers with 20 or more employees has been confirmed as 1 July 2018, with pilot participation commencing January 2017, and general use available from July 2017.

There will also be a new $100 non-refundable tax offset for small businesses for expenditure on Standard Business Reporting enabled software [Note: this proposal has since been abandoned]

Single Touch Payroll is automatic software-enabled reporting of payroll information to the Tax Office at the time of payment. This avoids the need for separate PAYG reporting and the production of end-of-year payment summaries. See further: Minister for Small Business.

The government is also looking for ways to make GST reporting simpler for business with turnover under $2 million.

Commentary and background prior to the MYEFO announcement

• Treasurer to use MYEFO to take out budget trash
• Australia’s MYEFO Could be Ugly
• ABC News online – a spending problem
• An inside perspective on the Tax White Paper
• bettertax.gov.au

This page was last modified 2018-01-17