Black & White Finance update - 2019 Federal Budget
The budget was handed down last night in Canberra and here is our summary of it, through the lens of a property and finance perspective and of course, in Black & White.
The budget included:
Increased funding to infrastructure to help commuters travel around our congested cities – the big winner for current and future property owners in major cities
A range of tax cuts for individuals and businesses, with a focus on young Australians and low to middle-income earners
A number of positive superannuation changes
Aged care measures
Increased funding for infrastructure
In an aim to tackle our major city congestion struggles, an extra $3 billion was pledged on top of the $1 billion already allocated to the “Urban Congestion Fund”.
Treasurer Frydenberg said this extra money was about introducing “practical measures” to cut commuter travel times. So, expect to see more carpark, airport and motorway, bridge, high-speed rail and local metro line construction going on. In particular, Frydenberg promised fast rail corridors from Sydney to Wollongong, Geelong to Melbourne, Brisbane to Sunshine Coast and Brisbane to Gold Coast and Melbourne to Shepparton, Traralgon, and Wodonga.
Individuals & Families
Individual workers on up to $126,000 a year will get a tax cut. This tax cut will provide a saving of up to $1080 for a single income family and up to $2160 for dual income families, a year - not bad at all.
Plus a host of other benefits to tax rates and thresholds to commence in 2022-23 and later income years.
Businesses
They’ve increased the instant write-off threshold from $25,000, to $30,000. What this means is if you bought a car before and it cost a business $25,000, that business could write it off immediately as a deduction. Now a business can buy a car and if it’s worth $30,000, it’s an instant write off too.
There's a host of other measures to company tax rates, funding for the ATO and more, but this tax-write off increase was the big one.
Superannuation
Without getting into too much detail, there was a raft of positive changes to Work Tests, Spouse contributions, changes for when we’re merging superannuation funds, Non-Concessional Contributions and finally, simplifying our Exempt Current Pension Income reporting. You can find more information on these changes online if you’d like to know more about it.
Aged Care
$527 million for a Royal Commission into Violence, Abuse, Neglect and Exploitation of People with a Disability. There was a real focus on improving the quality, safety and accessibility of aged care services – a real shift here.
Our Future
Overall, the budget delivered a surplus of $7.1 billion for 2019/2020, the first time for a long time. The current government promised if all goes to plan, that this budget surplus will rise again in years to come. But the budget surplus could be around $9.2 billion in 2022/2023, even as these ranges of tax cuts come into effect.
In Summary
We can see that infrastructure is the big winner in this year’s Budget and those low to middle-income earners. This summary fits in timely with our property ‘hot spot’ short video which we will be sharing with you on Friday morning, to close the loop on our Property Market Opportunities collaboration series with Josh Master from Buyside – so stay tuned.
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