While our Canberra counterparts sit back and have a toast at the prospect of a declining national debt, the media and general public have a chance to absorb the proposals of the 2018 Federal Budget. And it’s fair to say that the initial response from the media is positive. Scott Morrison’s third budget is headlined by $140 billion in tax cuts over the next decade, immediate tax relief of up to $1,060 a year for middle-income households and a fundamental reform of the tax system.
Let’s take a look at the highlights of Budget 2018:
Summary of Budget measures
Note: These changes are proposals only and may or may not be made law.
From 1 July 2018
- Low and middle income earners are to benefit from tax savings of up to $530 per person (or $1,060 per couple).
- The Medicare Levy will remain at 2%.
- The $20,000 instant asset write-off for business with aggregate turnover less than $10m will be extended
until 30 June 2019.
- Funding for home care services and residential aged care will increase.
From 1 July 2019
- A one year exemption from the ‘work test’ will apply to recent retirees who have less than $300,000 in total super savings.
- Life insurance can only be offered in super on an ‘opt-in basis’ to new members under 25 years of age or members with inactive accounts or an account balance under $6,000.
- Fees when exiting a super fund will be banned and administration/investment fees will be capped at 3% pa on accounts with balances of less than $6,000.
- The ATO will work to proactively reunite Australians’ dormant superannuation funds with their active account, with inactive balances less than $6,000 to be transferred to the ATO.
- The Pension Loans Scheme will be available to all Australians over Age Pension age and the maximum payments will increase to 150% of the full Age Pension.
View the 2018 Federal Budget with Gemma Dale (Director Investor Behaviour)
If you’d like to discuss anything in this year’s Federal Budget please contact us on 03 9672 5111 or email email@example.com.
Mark O’Toole CFP™