Federal budget 2017 summary: new taxes, banks bashed, more money for schools, rail and the disabled

That marks the end of our live budget coverage this evening. It has certainly been an eventful night.

No one can argue Malcolm Turnbull is a "do-nothing" prime minister anymore. Will it work out for him, or go the way of Tony Abbott's budget in 2014? How the former prime minister himself responds, along with the Coalition's more conservative elements, should be fascinating in itself. 

Stay tuned for be an interesting period of politics ahead.

Business leaders have focused on the government's inability to rein in spending as their primary criticism of the budget. 

"Tonight's budget shows the difficulty the government faces in getting spending under control." - Australian Chamber of Commerce and Industry chief executive James Pearson.

"The bottom line is that the Treasurer has opted to use the cover of faster economic growth, elevated commodity prices and innovative accounting treatments to fund significant new spending, rather than quicken the pace of fiscal repair."  - Australian Institute of Company Directors chief economist Stephen Walters.

"This budget lacks the ambition needed to fix the deep structural problems with our national economy and finances." - Institute of Public Affairs researcher Daniel Wild

"A practical and workable budget in the face of sustained political gridlock in Canberra that has stifled much-needed, wider reform." - Business Council of Australia chief executive Jennifer Westacott

... PWC chief economist Jeremy Thorpe. Take it away, Jeremy: 

"This is the Star Wars: Rogue One budget - the government has the plans but it hasn't yet tackled the debt star." 

Get it? 

It was said in advance that Malcolm Turnbull and Scott Morrison needed to walk a tightrope with this budget. 

It appears their strategy has instead been to straddle it, taking a step to the left economically, while leaning to the right on various social issues likely to appeal to the conservative base.  

Measures leaning left economically

• A tax increase, via the Medicare levy
• A $6 billion raid on the big banks
• More funding for the disabled
• Increased school funding
• Guaranteeing Medicare's future and dumping the rebate freeze
• Rail investment

Measures leaning conservative, socially

• Drug tests for welfare recipients
• Charges for companies employing foreign workers, making life harder for foreign property investors
• More funding for the AFP and anti-terrorism measures
• University sector targeted
• Little on the environment

On the delicate issue of housing affordability, they have tried to negotiate a middle ground, doing enough to be seen to be taking action while not upsetting their home-owning base by making major changes to negative gearing. 

Mr Morrison said he had been listening to the Australian people, but he has certainly been listening to the criticisms made of his government by his various opponents. One thing this budget will do is force both Labor and the Greens to the left and Pauline Hanson and Tony Abbott on the right to recalibrate their attacks as the government seeks to neutralise their arguments. 

Can they pull off this fight on two fronts? It should make for a fascinating few days ahead. 

A round-up now of how some of other media outlets have interpreted the 2017-18 budget. 

Laura Tingle in the Australian Financial Review writes: 
"This is a budget that will have Labor 'spewin': it is a budget that Labor could only dream of bringing to the parliament, knowing full well that a Coalition opposition would never tolerate half the things in it."

Denis Shanahan in The Australian writes:
"This budget may very well make Shorten regret the Medicare scare success, or at least his continued efforts to keep it alive and pursue the Coalition over the NDIS, Gonski school funding, negative gearing, housing affordability, savings measures blocked in the Senate and a banking royal commission. After too long, the Prime Minister has stirred from a fog of overconfidence, vacillation, unreality and delay to strike back at Shorten in the all the areas where he has hurt the Coalition most."

Katharine Murphy in The Guardian writes:
"The Prime Minister is fond of branding his various inspirations and reversals 2.0. This version of a Coalition government, Coalition 2.0, is high taxing and high spending: it builds things, and cares about your health, and wants to do a little bit on housing affordability."

Annabel Crabb of the ABC writes:
"You can tell a lot about a budget by looking at who it punishes. And basically, this budget targets anyone who's ever appeared on A Current Affair accompanied by a low, menacing soundtrack... Banks! ... Foreigners! ... Dole bludgers!"

Australian Council of Social Services ACOSS CEO Dr Cassandra Goldie has delivered a mixed reaction to the Turnbull government's budget. 

While welcoming the "change of tack to invest in health, education and housing" she has delivered a scathing rebuke to the plans to drug test welfare recipients. 

"In social security, the government remains stuck in the 2014 budget mindset that demonises and impoverishes people who are unemployed...

"It speaks volumes for the government's approach to social security that unemployed people are denied the one-off $75 Energy Supplement and it proposes to drug-test recipients and deny the Disability Support Pension to people if their disability is drug-related... 

"A major restructure of penalties for unemployed people saving more than $200 million a year is proposed without convincing evidence the system is widely abused."

Former Queensland premier Anna Bligh was announced as CEO of the Australian Bankers' Association in February. 

She must now be wondering what she's got herself into.

On a day being described as "Black Tuesday" for the big banks, when $14 billion was stripped from their value, Bligh immediately went on the offensive.  

"This new tax is a direct attack on jobs and growth, not just a tax on the five largest banks.

"It is a tax that will hit Australians by hurting investment and could have unintended consequences... it will affect the entire banking system.

"This new tax is not a well thought out policy response to a public interest issue, it is a political tax grab to cover a budget black hole."

Ms Bligh was particularly critical of the lack of consultation with the banks ahead of the decision. 

Undoubtedly one of the hot topics going into this budget was housing affordability. 

Here's a recap of some of the main measures contained in the budget on the demand side. 

First homebuyers are able to save via their super - putting in extra money to enjoy the 30 per cent tax benefit up to a total of $30,000. 

Foreign homebuyers will be hit with a vacancy tax if their property sits empty for six months or more in the year. 

Retirees have been given a $300,000 incentive to sell the family home. Home owners aged 65 and over selling a home they have lived in for 10 or more years will be able to make a non-concessional super contribution of up to $300,000. Both members of a couple are allowed to take advantage of this measure for the same home.

Richard Di Natale has also appeared on ABC saying the budget does not enough to assist young people, particularly those wrestling with housing affordability. 

He's not all together against the change in focus, however. 

"I am enjoying watching the Libs reluctantly burying neo-liberalism."

Meanwhile, colleague Sarah Hanson-Young has a suggestion that will perhaps resonate with welfare recipients. 

Quite a lot of people on social media questioning why there wasn't more in tonight's budget to address environmental concerns. 

Well, the only time the word 'environment' appeared in the speech was regarding the acquisition of a larger share or outright ownership of Snowy Hydro, from the NSW and Victorian State Governments.

However it was being used in the context of "streamlined environmental processes".

The word 'climate' did not appear in the Treasurer's speech. 

This nifty little interactive allows you to surf through the budget's main measures by category. 

Labor's Chris Bowen facing off with Leigh Sales now, and he is going hard on Morrison's tax increases. 

It's like we're in bizarre-o world tonight, folks. Is it opposites day? 

He is particularly focusing on the increase to the Medicare levy - "a tax increase on all working Australians".

He says while they're linking the increase to the NDIS it's really helping fund the government's tax cuts for big business.

Labor has, however, supported the government's new bank tax.  

Esteemed long-term parliamentary press gallery member Michelle Grattan writes:

"Scott Morrison has delivered a surprisingly big taxing budget that pays for the last burial rites of the 2014 toxic Abbott legacy."

Certainly it will be interesting to see how the budget is perceived by the right wing members of the Coalition. 

Leigh Sales has pointed out that the economic growth forecasts contained in the budget are nearly double the current rate. 

The Treasurer says they are mid-range compared to most ratings agencies. 

There will be no legislation to ensure the banks don't pass on their new tax to consumers, but Mr Morrison says customers should be free to take their business elsewhere, including to regional banks which won't face the new tax. 

Handshakes all round.

Indeed, Leigh Sales' first question is about this being a "Labor budget". 

Scott Morrison says the difference between the two parties is that the Coalition pays for its spending measures. 

Sales now grills him about the tax increase that is the Medicare levy rise, due in two years' time. 

Morrison says Australians will be happy to pay it given what the money is going towards. 

Guaranteeing Medicare, funding for the disabled, increased funds for schools, and cracking down on the banks - there's certainly a lot in there that could be described as Labor-like.

The budget "will go a long way towards addressing the key concerns that provided a near-death experience for the Liberal-Nationals coalition," writes Paul Osborne. 

Every year about this time, millions of Australians are trying to figure out what the budget means for them. 

This list of budget winners and losers should help. 

One of the biggest losers has to be the banks, with a new tax and punitive measures for misbehaving executives. It's already being described as Black Tuesday for them.

A lot to digest there in a short period of time. For those who'd like to read the Treasurer's words in full, they are here. 

• Tax cut for first home buyers' deposit savings, by allowing them to salary sacrifice into their superannuation account over and above their compulsory superannuation contribution from July 1. Contributions will be limited to $30,000 per person in total and $15,000 per year.

• Allow downsizers over the age of 65 to make a non-concessional contribution of up to $300,000 into their superannuation fund from the proceeds of the sale of their principal home.

• States to be held more accountable on meeting housing supply targets. 

• $1 billion National Housing Infrastructure Facility to be established, based on a UK model, to assist development. 
• Release Commonwealth land for development, including a new 6000-home suburb in Melbourne at Maribyrnong.
• More affordable rental housing via long-term, low-cost finance.
• $375 million for a permanent extension of homelessness funding to the States
• An annual foreign investment levy of at least $5000 on future foreign investors who fail to either occupy or lease their property for at least six months each year.
• Prevent developers from selling more than 50 per cent of new developments to foreign investors.