The 2019-2020 ‘Back in the Black’ Budget and what it means for you
A pre-election Budget often avoids major changes and focuses on delivering favorable outcomes for the majority of voters. With the election now set for May 18th, Josh Frydenberg’s first budget as treasurer is no different.
We have seen recent Budgets place a lot of scrutiny on Australians aged 60+ with Superannuation, Centrelink and Tax concessions under the microscope. Scott Morrisons Coalition government have shifted their focus for the 2019-2020 budget, with Tax Cuts, Small Business Tax Concessions and Infrastructure Spending among the highlights. As with all Budget announcements, any proposal’s need to pass through parliament to be confirmed.
The budget appeals to Australians hip pocket with an extension of the previously announced multi-year tax package.
The initiatives proposed to reduce the tax burden for low to middle income earners are:
- Increasing the Low and Middle Income Tax Offset (LMITO) to a maximum of $1,080 (from $530) for Individuals who have a taxable income between $48,000 – $90,000. Individuals with a taxable income under $48,000 will receive a partial-offset.
- Expansion of the 19% tax bracket has received additional support, raising the upper income limit to $45,000pa. This will result in less tax paid by individuals with taxable income under $45,000pa from 1 July 2022.
- From 1 July 2024 those who have a taxable income between $45,001 – $200,000 will pay a tax rate of 30%, down from the previously proposed 32.5%.
Superannuation was overlooked for major reform however a few smaller initiatives have been proposed for greater flexibility regarding contributions to super and alignment of Superannuation legislation with Centrelink’s Age Pension framework.
- Lifting the Contribution Age Eligibility to 67 years effective July 2020. Currently you must meet a Work Test to contribute to Super from age 65 onwards.
- Furthermore, those aged under 67 will now be eligible to ‘bring-forward’ Super contributions, up to $300,000 in a single Financial Year.
- An extension of spouse contribution eligibility from Age 69 to Age 74.
Also included in the budget is a $285 million direct payment to almost four million Australians in receipt of a Centrelink entitlement. The one-off Energy Assistance Payment will be $75 for singles and $125 combined for couples.
Recipients of the following entitlements will be eligible for an Energy Assistance Payment.
|Age Pension||Disability Support Pension|
|Carer Payment||Parenting Payment (Single)|
|Veterans Service Pension||Veterans Income Support Supplement|
|Veterans Disability Payments||War Widower Pension|
|Plus certain permanent impairment payments|
The local Geelong area has received a nod as one of the fastest growing regions in the country (and it certainly helps being in a tightly held electorate) with a Melbourne to Geelong Fast Rail proposal which is expected to cut travel time in half. The Federal Government will tip in up to $2billion toward the project on the condition that funding is matched by the Victorian Andrews Government.
In addition to reducing travel time between Geelong and Melbourne, local commuters will benefit from a $700 million duplication of the Waurn Ponds to South Geelong train line. The additional 12.6km of track will allow additional services to be added into the line, expected to run every 10 minutes during peak hours.