In what was widely anticipated as a pre-election budget, Scott Morrison last night released the federal budget. Most agreed it was just that, being mainly about handing out goodies to taxpayers. The Government is pitching a plan to deliver tax relief to lower and middle-income Australians, which it says will benefit more than 10 million people.
There is also a promise of a return to surplus, which has come forward by one year in this budget, yet remains just that – a promise. And we will be going to the next federal election without knowing whether it will be delivered.
The tax offset is the most immediate of the tax cuts announced in the budget, effective from July 1.
The Government is pitching a plan to deliver tax relief to lower and middle-income Australians, which it says will benefit more than 10 million people.
The offset increases incrementally for those earning between $37,000 and $48,000, before the maximum offset of $530 is applied to those earning between $48,000 and $90,000.
The benefit then gradually decreases to zero at a taxable income of about $125,000.
For those earning between $48,000 and $90,000 it is worth $530 a year, or about $10 dollars a week. So if you cut out 2-3 take away coffees per week - you could save yourself the same. Other taxpayers will wait longer, but, eventually, everyone will get a tax cut.
Following the fallout from last year's Superannuation changes budget - the news on this front is less confronting than before.
The government will require Super fund members to "opt in" to buying life insurance if they are under 25, have a balance of less than $6,000, or have not made a contribution for 13 months. It estimated about 5 million people would have the opportunity to save $3 billion on insurance premiums. This particular policy will have supporters and detractors, but there will be a new market for selling insurance to those who end up not being covered. Whether it is better to have young people covered by insurance they "don't need", or to have money "in their pocket" (or at least not having their Super eroded, so early in life) in a moot point.
Exit fees for wanting to leave super-funds will be banned and ATO will start proactively hunting down inactive super accounts and reuniting them with their owners' active funds, stemming the flow of fees super funds earn from inactive accounts.
Other Interesting Tidbits
- Freezing the ABC's budget for the next 3 years, which will save the government $84 million.
- Providing $50.3 million over four years from 2018-21 to support the Dutch prosecution of those responsible for downing Malaysia Airlines flight MH17 in Ukraine in 2014.
- $49 million Captain Cook project - the government has pledged almost $49 million to commemorate the 250th anniversary of James Cook’s first voyage to Australia and the Pacific.