By Peter Kelly
(Realise Your Dream)
Well, another Federal Budget has been delivered to the Australian public.
On 2 April 2019, The Hon Josh Frydenberg delivered his first Budget as Federal Treasurer.
The good news is that the Budget has forecasted a return to surplus of around $7.1bn in 2019-20. Australian will earn more than it spends!
With a Federal Election yet to be called, but just weeks away, the Budget contained some modest hand-outs aimed to get the Morrison Government re-elected.
Ten million low- and middle-income earners are the winners as they will receive an immediate tax cut, which is being delivered by way of an increase in the Low- and Middle-Income Tax Offset (LMITO). The increase will be available for the next three years and will see the LIMITO more than double, to $1,080 for Australians with taxable income of between $48,000 and $90,000. A more modest Offset is available for those on lower incomes, and the Offset cuts out when taxable income reaches $126,000.
It has been estimated that by 2024, 94% of Australians will have a marginal tax rate of 30% or less.
By contrast, the top 5% of income earners will pay a third of all taxes collected.
Australians who receive a range of government income support benefits will receive a one-off payment of $75 for singles, and $125 for couples, to help with their energy bills. This payment is planned to be made before 30 June 2019.
Superannuation was largely untouched in this year’s Budget, however, from 1 July 2020, people aged 65 and 66 will be able to make super contributions without having to meet the work test, and the maximum age spouse contributions can be made is to be extended from 69 to 74.
Infrastructure and health received injections of cash.
Expect to see the skyline silhouetted with cranes. The Government has announced further significant spending on roads, rails, airports and the like.
Included in the Budget was an allocation of $500m to get cars off the roads by building more commuter car parks, thereby encouraging people to travel by train. For anyone who tries to navigate capital city peak hour traffic, this will be welcome news.
Small to medium businesses will benefit from the planned increase in the instant asset write-off for purchases of up to $30,000.
Older Australians have not been ignored with an additional 10,000 aged care home care packages being announced, and a further 13,500 residential aged care places being made available. With the aged care system being strained with the increasing demand for services and support, this is welcome news but sadly is nowhere near enough.
Additional funding has also been directed towards the delivery of primary and frontline health care.
Implementing the Budget announcements will be the next big challenge for the Government. Legislation will need to be passed in order for the changes to be implemented. But with the Federal Election likely to be called within a matter of days, and with only limited Parliamentary sitting days before then, having the legislation passed is looking even more tricky.
The next couple of months are going to be very interesting indeed!
PK believes people have the right to accurate, affordable and unbiased information that addresses all aspects of their preferred retirement lifestyle, thereby giving them the opportunity to make informed decisions that will empower them to live out their lives with dignity, certainty and security.
Tealey’s ambition is to change how people think about their retirement, he wants people to dream, plan and realise retirement is not defined by a magical age prescribed by the legislation.