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Australia treasurer promises fair budget that reins in debt

12 May 2017

On budget night, the government downplayed the company tax cut, which rated only a glancing, one-line reference in Morrison's speech.

In May a year ago, Treasury secretary John Fraser told a Senate hearing the cost of cutting taxes for all businesses to 25 per cent would cost $48.2 billion over the 2016-27 period.

Australia's treasurer on Tuesday promised a budget for the next fiscal year that would be fair and rein in mounting debt.

"It's interesting to observe how the government is responding to concerns", Watkins said.

That measure alone is expected to raise an additional $8.2 billion of taxes in its first two and a half years in operation.

Labor will now have a new, larger figure to use as Mr Shorten prepares to give his budget reply speech on Thursday night.

Mr Morrison said any threat to the tax cap - for instance an unexpected surge in wages growth, or a terms of trade boom that delivers a fresh surge in tax revenue - would force the government to act even sooner than 2022/23.

Following Question Time, Mr Morrison said the government was being "upfront" by revealing the new figure.

"The levy will only affect our five largest banks with assessed liabilities of $100 billion or more and does not apply to superannuation funds or insurance companies".

Bank executives will also face tougher penalities for misconduct under a tough new new Banking Executive Accountability Regime, which will require all executives to be registered with the regulator.

"If in breach, they can be deregistered and disqualified from holding executive positions, and be stripped of their significant bonuses", the Treasurer said.

A super tax, new regulatory bodies, and big fines for new misconduct rules - it wasn't a great day at the office for the banks.

In a final whack at the sector, a permanent team will be established within the ACCC to investigate competition in the nation's banking and financial system, as recommended by the Coleman Committee.

'There are only four countries in the OECD with tax rates higher than us now, and that number has been shrinking, ' Mr Morrison said.

"The only people paying more tax from July 1 this year are the banks and multi-nationals", Mr Morrison said, in a line that could have come directly from the ALP play book.

Sky News has reported that the government in next week's budget is set to levy a fee upon any properties which are owned by overseas investors and are left vacant as part of conditions imposed by the Foreign Investment Review Board when the purchaser in question is approved for Australian property purchases. While prices in Sydney were unchanged in April from March, they were still up 16 percent from a year earlier, pushing the city's median house price to just under A$1 million ($736,000), according to data from CoreLogic Inc. "But we will work with the states and territories and local governments to get more homes built".