Australia plans major spending plus surplus in 3 years

After delivering the Federal Budget last night, one of Treasurer Scott Morrison's first interviews was with the ABC's Leigh Sales - and she didn't go easy on him.

Morrison promised to assist regulatory agencies in using any "flexible and calibrated" controls at their disposal.

Until now, employers have contributed one to two per cent of their payroll to training if they employ foreign workers and these requirements have been hard to police, Morrison said.

He also gave the major banks both barrels at the breakfast.

A $1.2 billion skills fund to provide new apprenticeships will be paid for by a foreign worker levy.

The 0.06-percentage-point levy on money the big banks borrow to fund their lending excludes deposits of less than $250,000.

"This is the bank's contribution to the budget fix task; it's something that happens in the United Kingdom and Europe and brings Australia in line with other jurisdictions".

In addition, bank executives will face tough penalities for misconduct under a Banking Executive Accountability Regime.

Scott Morrison says he has been listening to voters and reflecting on what he has heard.

Australia's A$1.7 trillion economy has outperformed many of its rich world peers since the global financial crisis, but it has in more recent years struggled to manage the end of a mining investment boom that underpinned much of its wealth.

"And anyone who has had much to do with Centrelink will see the irony in the demerit system".

As such, it will boost bank competition for deposits and if that results in lower profitability then banks should increase their margins by boosting mortgage rates.

After years of the electorate crying out for help to make buying a first home easier, the Coalition has announced a suite of measures created to improve housing affordability.

"Whether you are saving to buy a home, spending a high proportion of your income on your rent, waiting for subsidised housing, or you're homeless, this is an important issue to you", Mr Morrison said. Contributions will be limited to A$30,000 a person and A$15,000 a year. "Under this plan, most first home savers will be able accelerate their savings by at least 30%".

Older Australians will be encouraged to downsize by being able to make a non-concessional contribution of up to A$300,000 into their superannuation fund from the sale of their home.

"While we welcome the confirmation the annual humanitarian intake will rise, the Australian Government should be looking to be more creative in resettling those who have been forced to flee violence and persecution". Additionally, plant and equipment depreciation deductions will be limited to expenses incurred directly by investors, effective from today (10 May).

The Commonwealth Government will also try to gain a larger share or outright ownership of the Snowy Hydro scheme.

Significantly, we will invest an additional $115 million in mental health, including funding for rural telehealth psychological services, mental health research and to prevent suicide. That will unlock funds for New South Wales and Victoria states to reinvest in other infrastructure. "But this is not new money, it has just been reallocated within the existing portfolio.".

Mr Morrison said the Government has legislated around $25 billion in measures to help the Budget, taking to more than $100 million the total measures implemented since 2013.

Critics of foreign investment have long warned about "absentee" property owners leaving floors of empty apartments in inner-city hubs and adding pressure to already tight rental markets.

For the coming 2017-18 year growth is forecast at 2.75% and unemployment at 5.75%.

Requirements preventing developers from selling over 50% of new developments to foreign investors will also be re-introduced.

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