TREASURER Scott Morrison has been attacked for having a 'Labor-like' Federal Budget, after he scrapped $13 billion in zombie savings.

The Turnbull Government is starting afresh from Tony Abbott's horror 2014 budget, vowing to make the 'right choices' for Australia.

Treasurer Scott Morrison has scrapped $13 billion in zombie savings measures from Tony Abbott's budget.

The 2017 Budget also seeks to entirely recover from Labor's Mediscare campaign that nearly cost the Coalition the election while tackling the Opposition's main arguments on schools' funding, training and a calls for a Royal Commission into the banks.

Big nation building projects will get an extra $75 billion over ten years, while schools will get an extra $18.6 billion, and tough new measures will be placed on the financial sector.

But with new taxes on banks and big multinational companies, the Budget is still projected to return to a surplus by 2020-21.

"The only people that will pay more tax on July 1 are banks and multinationals," Mr Morrison said.

The Treasurer believes better days are ahead, thanks to an uptick in the global economy.

"This budget is about making the right choices to secure those better days ahead," Mr Morrison said.

He assured Australians the government had listened to their frustrations about cost of living pressures and promised a practical and fair budget.

"It's been a fair while since most hardworking Australians have had a decent pay rise," he said.

"I know this has put real pressure on Australians and on their families.

"I believe though that we are now moving towards the end of this difficult period."

THE PITCH

A central plank of the 2017 Budget is tough new measures on banks to boost competition in the sector.

Banks will face a new tax that is expected to recoup $6.2 billion over the forward estimates and help to repair the budget. This will cover almost half of the "zombie" savings measures the Turnbull Government has been unable to get through the senate. Only Australia's five biggest banks will be hit with the new tax which will be on liabilities.

Mr Morrison said it was "fair" to ask the banks to do their part to repair the budget.

Banks will also be forced to report any misconduct under new mandatory reporting rules.

Any bank that breaches the misconduct rules will face penalties of up to $200 million for big banks and $50 million for smaller banks.

Senior banking executives will also be more accountable as they will be forced to be registered with APRA and can be deregistered and stripped of bonuses for any misconduct.A permanent team will also be set up within the ACCC to investigate competition in the sector.

The Government will launch a "one-stop shop" where Australians can take their complaints about the financial sector called the Australian Financial Complaints Authority.

Australians will also be able to access their financial data under an open banking system from 2018 which will help them shop around for cheaper services.

The government also expects to gain $4 billion this year alone from taxes on big multinational companies.

The federal government has projected a deficit of $29.4 billion for 2017-18, down from its projection last year.

It expects to reach a surplus of $7.4 billion by 2020-21, an improvement on the $1 billion surplus projected at the midyear budget update in December.

Mr Morrision was confident last night the conservative estimates and savings measures announced in the budget would help Australia maintain it's coveted AAA credit rating.WELFARE CRACKDOWN

In a surprise move, the Turnbull Government will bring back a trial on drug testing welfare recipients.

It's a measure Tony Abbott was unable to lock in during his time as Prime Minister.

Welfare recipients that fail the test will be placed on the Government's cashless welfare card, which quarantines 80 per cent of welfare payments to a debit card to prevent recipients from spending money on drugs and alcohol.

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.

A demerit point system will be introduced which will mean welfare recipients lose their payments if they continually flout the system.

HEALTH

Another key plank of this year's budget is to fully fund the National Disability Insurance Scheme.

The government will impose a 0.5 per cent rise in the Medicare Levy in two years' time to fully fund the $6 billion gap in the NDIS funding.

But in a bid to recover from Labor's campaign on Medicare, there will be a $10 billion "reinvestment" in health funding.

Spending on hospitals will increase by $2.8 billion over four years.

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.

The government will also lift the freeze on the Medicare rebate from July, which is set to cost the government an extra $2.2 billion but will be covered by an increase in the levy.

EDUCATION

As announced in the lead up to the budget, schools will get an extra $18.6 billion over ten years.

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

The extra funding will be paid for by a $2.8 billion hit to universities over the next two years.

University fees are expected to hike by up to $3000 and students will be forced to pay back loans earlier.

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

A new training fund will be launched paid for by a levy on businesses bringing in foreign workers.Businesses will have to pay an annual levy of $1200 -$1800 per worker per year to bring in people on the two-year temporary worker visa. They would also have to pay between $3000 and $5000 to bring in a worker on a permanent skilled visas.

It's expected to raise $1.2 billion over four years for the Skilling Australians Fund.

States would only be able to draw on the fund once they delivered on their commitments to train new apprentices.

HOUSING AFFORDABILITY

First home buyers, downsizers and renters can expect some help from the 2017 budget.

"There are no silver bullets to make housing more affordable," Mr Morrison said. "But by adopting a comprehensive approach, by working together, by understanding the spectrum of housing needs, we can make a difference."

Mr Morrison announced first home buyers would be able to put voluntary contributions into their superannuation of up to $30,000 in total to help them save a deposit 30 per cent faster.

Contributions and earnings will be taxed at 15 per cent rather than at marginal rates.

But first home buyers will only be able to withdraw what they contribute, rather than access their retirement savings.Negative gearing and capital gains tax will remain untouched.

Downsizers will get special exemptions from superannuation rules to allow them to put lump sums into their retirement savings from selling their family home.

The Commonwealth will scrap the National Affordable Housing Agreement but will still provide $1.3 billion to the states and territories under new arrangements to boost the stock of affordable housing.

And a new body will be established from July 1 2018 to help provide more affordable rentals, along with increasing the discount on capital gains tax to 60 per cent for investments in affordable housing.NATION BUILDING PROJECTS

The government will pour an extra $75 billion into infrastructure spending over the next decade with much of it going to big nation building projects.

An inland rail linking Melbourne and Brisbane will get an $8.4 billion, with the project set to begin in the next financial year.

It's estimated to create 16,000 jobs at the peak of the construction phase.

Western Sydney airport will get $5.3 billion over the next ten years. The airport is expected to create 60,000 jobs in the long term and is projected to be complete by 2026.

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

News Corp Australia

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