Australia treasurer promises fair budget that reins in debt

"This represents a fair contribution to the community from our major banks, is consistent with other advanced countries and helps foster competition from smaller banks", according to budget papers.

A senior executive at one of the Big Four banks warned the government of "unintended consequences" of introducing a new levy.

The banks thought making Bligh their chief lobbyist was a stroke of genius, the theory being it might settle down Labor calls for a Banking Royal Commission.

Australia's Treasurer has urged the nation's big banks to absorb a new 6.2-billion-Aussie-dollar (4.56-billion-U.S. -dollar) levy despite a warning from the banks that the tax hike would be handed down to customers.

As part of the budget, Canberra said banks could face penalties of up to Aus200 million if their staff were caught ripping off customers, while regulators were handed more money to better police them.

"They have done it because they think banks are an easy target", she said. As the chart above shows, expenditure is set to keep rising at a similar pace, but the government expects a surge in flows into its coffers to overtake that.

'I'm uneasy about it, and I understand banks do pay company tax. but the arguments against the mining tax applied by Wayne Swan can be applied here with equal force, ' the former prime minister told a post-Budget forum in Melbourne on Wednesday.

At the same time it has managed to return the budget to surplus within four years.

The Prime Minister said that would be unwise.

A wider welfare crackdown will also include financial penalties for dole bludgers that fail to turn up to appointments or to take on suitable work.

The budget also saw about $13 billion in so-called "zombie" saving measures, many of which date back to the notorious 2014 budget, finally dropped in favour of new revenue measures.

The Medicare levy has also been raised from 2 to 2.5 per cent to pay for Labor's National Disability Insurance Scheme, which will be fully rolled out by 2020, a raise that will impact almost every taxpayer.

There'll be an extra $115 million for mental health and an extra $1.4 billion for health research, including $65.9 million specifically for research into childhood cancers.

Schools have been promised an extra $18.6 billion over the next decade and there'll be some hip-pocket relief for Australians including pensioners.

That amounts to $2.2 billion over the next four years.

"We've had a fights about funding for several years". The budget pledges $8.4 billion in equity to the Australian Rail Track Corporation to pay for the project that it forecasts will generate 16,000 jobs at the peak of construction.

A 2.5 per cent efficiency dividend will be imposed on universities over the next two years.

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

The $20,000 instant asset tax write-off will be extended for another year for businesses with a turnover of up to $10 million.

"There are no silver bullets to make housing more affordable", Mr Morrison said.

As for the levy on banks: "We're not going to stand in the way of it".

Morrison has hinted at a package to tackle affordability and help first home buyers, while foreign investors could be slugged with new fees if they leave their investment properties empty.

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