Australia’s current government unveiled their proposed 2019-20 Federal Budget earlier this month. This budget has dual purpose as both an election campaign and releasing the Liberal party’s roadmap for the next 12 months (should it win the election in May). Posting a $7.1 billion surplus to bring Australia into the black, the key theme was ‘a stronger economy and a secure future’. The features included substantial income tax cuts for workers earning less than $126,000 per year over the next decade and investment in infrastructure. The big question is, if the current government stays in power, what could this mean for you?
In his speech, Treasurer Josh Frydenberg stated that housing affordability was a key priority for the Government, pledging $1.7 million toward community housing, however the budget offers little in the way of assistance to boosting a sluggish property market. Whilst the state based 1st homebuyers grant remains an option for many first home buyers, subject to the limits and conditions imposed by each state, there remains little in the way of assistance from the federal Government for those looking to buy their first property. That said, the extra available cash as a result of the proposed tax cuts could help those saving for their first home or those looking to make further investments.
The Federal Labor party has proposed controversial changes to negative gearing and capital gains tax exemptions, should it win the election. The Government has called these proposals reckless and foreshadowed that the changes could cause property values to fall by as much as 8% whilst increasing rents by up to 12% over the next 2 to 3 years. This is not good news for investors or first home buyers!
We have summarised the Federal Government Budget into some key points. Who wins? Who loses?
- Taxpayers – $158 billion in extra tax relief
- Small/Medium Businesses – increased instant asset write-off threshold from $25,000 to $30,000 per asset
- Regional Australia – spending big on improving roads and road safety, acknowledging two thirds of crash deaths occur on regional roads
- Mental Health – investing almost half a billion dollars in mental health and suicide prevention strategy
- Car Commuters – a new $500 million fund set aside for upgrades to commuter car parks
- Fight against Cancer – listing of a new cancer drug on the Pharmaceutical Benefits Scheme
- Crime Fighters – Intelligence agency ASIO and the Federal Police are set to receive more than $500 million in funding over the next five years
- Welfare Recipients – introduce new data-matching technology to prevent over-payments for working income support recipients
- Urgent NDIS Needs – there will be an underspend of $1.6 billion in 2019-20 due to a slower-than-anticipated rollout
- Multinationals – $3.6 billion in extra revenue from multinationals and high-wealth individuals is expected from a billion-dollar investment in the Tax Avoidance Taskforce
- Foreign Doctors – saving of almost $300 million over four years by reducing the number of foreign doctors brought to Australia
If you would like to know more about how the proposed 2019-20 Federal Budget may affect your personal situation, give us a call today (08) 9367 4222 [email protected] or fill out the form on this page.