Economic, Commerse & Financial industry :: World finance

Federal budget 2016 poor set to be worse off anu modelling shows

AUSTRALIA’S poorest families will be worse off than ever before once all the new Budget measures come into force.

Modelling by the Australian National Universitys research school of Social Sciences reveals how changes to family payments, childcare, taxation, tobacco excise and superannuation will hit poorer people the hardest.

The report, Distributional Modelling of Federal Budget 2016-17, also shows that high income groups are less impacted overall.

Report author Dr Ben Phillips found around 40 per cent of families on low incomes will be the most heavily impacted when everything in the Budget is taken into account.

By 2018-19, the report shows poorer families will be on average $1407 worse off a year.

Single parent families in the bottom 20 per cent of the income distribution are expected to be, on average, worse off by $1209 in 2018-19, the report found.

Families would be hardest hit by the removal of tax benefit part A and part B supplements which amount to around $480 a year.

The Budget which the Government has consistently declared fair actually gives a boost to households on higher incomes.

The modelling shows these households will be on average more than $200 better off a year largely due to personal income taxation cuts. Those on lower incomes will also be hardest hit by increases in tobacco excise.

A further four annual 12.5 per cent increases from September next year will more significantly impact low-income families, the modelling shows.

While noting the superannuation changes are positive for lower income households, the report warns it is not enough to address a regressive impact.

The top 20 per cent wears a $645 burden while the bottom 20 per cent gains $34 each year on average from the selected changes that were modelled for 2018-19, the report concludes.

Dr Phillips told the report showed it was lower income earners who benefited the least.

However he said he thought the changes in superannuation would have made a bigger impact on the Budget overall.

We found this Budget like the previous ones, continue to favour higher income earners rather than those on lower incomes, he said.

Dr Phillips also said lower income earners would be harder hit because the increase was higher than indexation.

He said the report showed higher income earners would spend around $144 more a year, compared to $135 for lower income earners.

However, this would burn up a bigger chunk of their earnings, therefore representing a much bigger hit for those not so well off.

A low income is classified as a single person earning around $27,000 or $57,000 for a couple with two children.

Treasurer Scott Morrison has been contacted for comment regarding the report.

The report comes as polling reveals many voters felt they would be worse off as a result of the Budget.

A Newspoll found 39 per cent of voters believed they would be worse off while just 18 per cent believed they will be better off, and 43 per cent uncommitted.

Only 37 per cent of those surveyed in the Fairfax-Ipsos poll believed the 2016 Budget was fair.

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Ford and holden bounce back hyundai gets belted according to newcar sales figures for august

FORD and Holden bounced back last month — as Hyundai sales hit reverse after the Korean brand’s discounts stopped and prices went up.

The two former Aussie favourites, Holden and Ford, are back near the top of the sales charts as Korean car maker Hyundai slipped to fifth, its lowest ranking so far this year.

Hyundai had been leading Holden for the first seven months of 2016 and previously had the top-selling car.

But sales of the Hyundai i30 have dropped by a staggering 75 per cent from their recent peak.

Toyota and Mazda still top the new-car market but Holden and Ford ranked close behind in August, according to preliminary figures shared confidentially among the car industry.

The Toyota Corolla was Australias favourite car for the second month in a row after the Hyundai i30 led the market earlier in the year driven by a $7000 discount.

The Toyota HiLux ute leads car sales outright year-to-date, narrowly ahead of the Corolla.

Toyota and Mazda are maintaining their dominance of Australian new-car sales despite a lack of heavy discounting, while Holden and Ford are enjoying strong sales based on the arrival of new models.

But discount brand Hyundai is proving it cannot maintain sales growth when it attempts to charge full retail prices for its cars.

When the discounts come off, sales stop, said the dealer principal for a leading metropolitan Hyundai showroom, who asked to remain anonymous.

Buyers are wising up to the fact these deals come and go, so they stay away until the offers return.

Another Hyundai dealer, who also asked to remain anonymous because dealers are advised by Hyundai Australia not to discuss company business with the media, said intermittent heavy discounting was bad for customers and bad for our business.

When you go from selling more than 100 cars one month to 30 the next, it makes it hard to keep full time staff employed, said the veteran car dealer. Hyundai likes to make out that it can compete with Toyota and the big guns, but in reality its a discount brand.

The dealer said some months, buyers pay more while in other months they pay much less, and that obviously upsets people who paid the higher price.

When the Hyundai i30 hatchback was $19,990 drive-away with automatic transmission, more than 6400 examples were sold in June the highest monthly tally of any car for 11 years.

But in August just 1800 Hyundai i30 hatchbacks were reported as sold and Hyundai sales overall as a brand were down by a staggering 45 per cent in August, the largest slump among the Top 10, according to the preliminary figures.

Hyundai declined to comment on the Korean car companys recent sales slowdown, and on claims of dealer dissatisfaction.

Official new-car sales figures for August are due to be published Monday.

Contrary to public perception, new-car sales figures are not based on actual vehicle registrations, they are cars declared or reported as sold by dealers and the car companies.

Top 10 car brands in August

Toyota 18,600

Mazda 9200

Holden 7600

Ford 6800

Hyundai 6500

Mitsubishi 6100

Nissan 5600

Volkswagen 4200

Kia 3700

Subaru 3300

Top 10 cars in August

Toyota Corolla 3500

Toyota HiLux 3300

Ford Ranger 2900

Mazda3 2800

Toyota Camry 2400

Holden Commodore 1900

Mazda CX-5 1900

Hyundai i30 1800

Toyota RAV4 1700

Hyundai Tucson 1600

Preliminary figures, rounded. Source: Car companies.

This reporter is on Twitter: @JoshuaDowling