8 Things You Need To Know From The Budget

What’s in, what’s out.

1. Treasurer Joe Hockey has handed down his second budget. Here's the big news.

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2. We’re still in deficit

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The government has handed down a deficit of $35.1 billion this year and predicts the deficit will reduce over the coming years until it hits $6.9 billion in 2018/19. Australia is projected to reach a surplus just beyond the forward estimates (Treasury will only make predictions up to four years ahead) - in financial year 2019/20.

But that's making a lot of assumptions, including that the iron ore price won't drop below $48/tonne (down from a peak of $185/tonne in 2011), and that the economy will be growing by 3.25% by 2016/17.

3. The government really wants to talk about small business

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The government's $5.5 billion small business package is supposed to be the good news story of this budget. The package includes:

- A 1.5% cut in the company tax rate for small businesses

- From tonight, all small businesses will be able to automatically claim a 100% tax rebate on any business-related items they purchase up to $20,000

- All unincorporated businesses will receive a 5% tax cut up to $1000

4. More money for national security

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Last year the government pledged $1 billion for national security. This year, they've handed out an additional $1.2billion. The package includes:

- $450 million for our spies to buy more spy things (pen gun? gun pen?)

- $296 million so the government can find and store more of our information

- $131 million to help the government implement its data retention laws

- $22 million to combat extremist propaganda on social media

- $750 million will also be provided for our troops fighting in Afghanistan and the Middle East

5. The Netflix Tax

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- The GST will now apply to digital services purchased overseas (think Netflix, movies, music ebooks and software).

- Expected to raise $350 million over the next four years

- The government will also crack down on multinational tax avoidance from big overseas companies

- The government will target roughly 30 companies but it's not clear how much revenue this would likely raise

6. No more six month wait for the dole

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The government has scrapped plans from last year's budget to force young unemployed people to wait six months before they are eligible for the dole. The wait will now be four weeks at a cost to the budget of $1.8 billion.

7. Big cuts to foreign aid

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$1 billion will be ripped from foreign aid. A $3.75 billion cut over the forward estimates was flagged last year and now the $1 billion cut has been confirmed for this year. Indonesia will lose 40% of its non-humanitarian aid budget as Australia's relationship with our northern neighbour endures its worst period in history.

8. Did Chris Pyne fix it? Well no, not really

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Education Minister Christopher Pyne promised he had 'fixed it' after his tertiary education reforms were twice defeated in the Senate, but the policy remains in the budget. The government plans to reduce government contributions to university fees for new students by 20% and to remove caps on fees.

The government will also force Australians with a HELP debt who live overseas to repay those debts - a measure which will only raise $26 million over four years.

Winners And Losers From The Budget