2016 State Finances Budget

Rationale

This budget rebalances the nation's finances around a single principle: those who earn the most should contribute the most, so that everyone has the opportunity to thrive. By cutting income tax for low earners from 25% to just 10%, and easing the rate on medium earners to 22%, the government puts more money directly into the pockets of working families who feel the squeeze of everyday costs most acutely. The cost of these cuts is met by asking high and elite earners to pay more—35% and 40% respectively—a progressive shift that strengthens public finances without burdening those least able to pay. The revenue raised funds meaningful new investment across the services people rely on: an additional $8bn for social welfare and $14.5bn for healthcare to protect the vulnerable and reduce waiting times, $5.5bn more for housing to tackle affordability and homelessness, and targeted increases to justice, defence, and business support to keep communities safe, the nation secure, and the economy growing. Together, these measures reflect a clear vision—a fairer tax system, stronger public services, and a country that invests in both its people and its future.