The 2019-20 Federal Budget was delivered on 2 April. The Budget doubles as a campaign launch for the federal election by also revealing the Government’s key campaign measures: tax cuts and new roads for the regions.
Major announcements included:
So, what’s in it for you?
You could be getting double the money you expected when you file your next tax return.
Last year, low and middle-income earners were promised a tax cut of up to $530 for the 2018/19 financial year. The Government has now promised to more than double this to $1,080 for singles and $2,160 for couples.
The tax cuts will benefit those earning up to $126,000 a year, about $4.5 million Australians.
The Government has promised a $100 billion infrastructure spend over the next 10 years. Queensland and Victoria are the biggest winners.
In Victoria, there’s $6.2 billion worth of projects, including $2 billion for fast rail between Melbourne and Geelong in the marginal seat of Corangamite, currently held by the Liberals.
In Queensland, there’s close to $4 billion in new projects, including the Bruce Highway ($425 million), the Gateway Motorway ($800 million) and the Warrego Highway ($379 million).
Nationally, there’s an additional $3 billion for the Urban Congestion Fund (totalling $4 billion) and $500 million for a Commuter Car Park Fund to improve access to key public transport hubs and ease congestion.
For the first time, medium-sized businesses with a turnover of up to $50 million will be able to instantly write off assets. Currently, only businesses with turnover up to $10 million can do this.
The assets threshold has also been increased from $25,000 to $30,000.
The Government also proposes to reduce the current tax rate for small business from 27.5 per cent to 25 per cent by 2021/22.
Modest changes to superannuation were announced. There are three changes which will benefit older Australians who can afford to make additional voluntary superannuation contributions – for example people who receive a large inheritance later in life:
These changes are proposed to commence on 1 July 2020.
An announcement made on the eve of the Budget that will also impact superannuation is proposed funding of more than $600 million over five years to facilitate the Government’s response to Misconduct in the Banking, Superannuation and Financial Services Industry (the Royal Commission).
Self Managed Super Funds
Administrative requirements for the calculation of exempt current pension income (ECPI) will be streamlined from 1 July 2020. ECPI may currently be calculated using either a proportional method, or via the segregation of assets.
The Government has announced that it will allow fund trustees with interests in both the accumulation and retirement phases during an income year to choose their preferred method of calculating ECPI. Funds will also no longer need to obtain an actuarial certificate when calculating ECPI using the proportionate method if all members of the fund are in the retirement phase for all the income year.
For age pensioners, the Government announced a one-off Energy Assistance Payment of $75 for singles and $125 for couples. The payment will be made this financial year, and will also apply for Newstart recipients.
Aged care will receive an additional $725 million in funding, including 10,000 new home care packages and greater financial support for residential care.
We’re here for you
If you’d like further information about any of the changes announced in the Federal Budget or their potential impact on you,
please contact us on (03) 9896 5100.