The Government also announced that from 2020 the value of penalty units will be indexed every three years in line with inflation.
MYEFO said, “The Government will increase the value of the Commonwealth penalty unit from $180 to $210, with effect from 1 July 2017. The value will be indexed every three years in line with the CPI with the first indexation occurring on 1 July 2020 (this will supersede the indexation arrangements announced in the 2015-16 Budget). This measure is estimated to have a gain to revenue of $90.0 million over the forward estimates period. In underlying cash balance terms this measure increases receipts by $80.0 million over the forward estimates.
MYEFO said that Federal budget deficits will increase by more than $10 billion in coming years as the Government battles low wage growth and falling company profits, but it insists it will still return a surplus in 2020-21.
Federal budget deficits will increase by more than $10 billion in coming years as the Government battles low wage growth and falling company profits, but it insists it will still return a surplus in 2020-21. MYEFO revised down the deficit announced in the May budget by $600 million to $36.5 billion.
MYEFO set aside $1.6 million for the establishment of a black economy taskforce, which was announced by Revenue Minister Kelly O'Dwyer last week and will police tax avoidance and welfare fraud.
The deficit will climb from $26.1 billion to $28.7 billion in 2017-18 and from $15.4 billion to nearly $20 billion in 2018-19, when net debt as a proportion of GDP will peak at 19 per cent.
The Green Army program, established under former Prime Minister Tony Abbott, will be terminated, saving $224.7 million over four years and $9.3 million this financial year.
The Government's pilot nanny program — also introduced by Mr Abbott - will be scrapped on January 1 after falling demand, resulting in a $170.4 million saving over four years.
It will also scrap the Assets Recycling Scheme, announced in the 2014-15 budget, which is expected to reduce gross debt by $20 million by 2019-20.
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