Tuesday 3rd May saw Scott Morrison hand down his first Budget. It was a much awaited budget due to it being an election year. I was very excited about the budget. It was my version of Christmas Day! Mainly because I’m a nerd, but also because this years budget has been long discussed. Talk of Tax Reform, major changes to Superannuation, and the removal of negative gearing has dominated political chatter. None of this was in the budget. I fully expect many more announcements to be made between now and election day on 2nd July. It’s already started with the election campaign in full swing. I have heard talk of taxes, super, bulk billing, negative gearing, tax reform and so much more – it’s all too much! It’s important to note here that whilst many of the announcements made during the budget will come into effect, they may take some time to be passed by senate, and some not at all. Sometimes its all talk, and we will hear a fair bit of talk during the election. So my advice – check with your accountant if you are concerned about an announcement. Does it affect you and your situation? It never hurts to ask. Here’s my winners and losers from the budget. Winners;
- Small Business owners – tax cuts are proposed for companies, and unincorporated businesses like partnerships and sole traders. These tax cuts will increase over the next 10 years.
- Individuals earning over $80,000 receive a tax cut due to the threshold being moved from $80,000 to $87,000. Proposed to start 1 July 2016.
- Australian Taxation Office – will received more funding for tax avoidance activities.
- Financial Advisers – due to the number of superannuation changes more people will need financial advice to understand their retirement needs and how to achieve it.
- Low income earners – no tax cuts or offsets directed to you.
- Smokers – Tobacco excise to increase.
- Transition to retirement pension holders – removal of tax exemption to earnings of assets supporting TTR’s limited the tax effectiveness of this situation.
- Individuals working towards their retirement – limits on super contributions put more pressure on the aging population.
- Multinational companies – tax increase to multinational companies.
- Tax Agents – more funding to the ATO generally means more pressure on Tax Agents to get taxpayers to lodge returns and pay debt.
If in doubt talk to your accountant, we love talking all things budget – so call me! Please note that this is general information and your circumstances have not been considered. Opinions published here are my personal view and not to be relied on.