— By: Matt Carter
Last night, the federal budget for 2017-18 was handed down by Scott Morrison. The deficit is projected at $29.4 billion for the coming year, but the treasurer has promised surplus of over $7 billion by 2020-21.
Key takeaways include a $75 billion investment in national infrastructure projects, including the long-awaited second Sydney airport and funding for new rail and roads, particularly in Victoria and Western Australia.
A six basis point levy on Australia’s five largest banks was also announced, which will raise over $6 billion over the budget and forward estimates. This levy, on items such as customer deposits over $250,000 and corporate bonds, will be sought from ANZ, Commonwealth, Macquarie, NAB and Westpac from 1 July onwards.
Here is a snapshot of some winners and losers from the Budget.
- Small business owners. The government will be extending the “instant access write-off scheme” by another year, meaning small business owners can immediately claim up to $20,000 of necessary business purchases for tax purposes.
- Pensioners. The elderly will see their pensioner concession cards reinstated, and one-off payments to singles and couples to help manage rising electricity costs. Further, up to $300,000 in non-concessional proceeds from the sale of a primary home will be allowed into super or pension funds.
- Homebuyers. Young people looking to buy their first home will now be able to salary sacrifice pre-tax and contribute up to $30,000 (up to $15,000 per annum) into their superannuation account, which can then be withdrawn to purchase a home, under the new First Home Super Savers Scheme.
- Schools. The government last week announced the reintroduction of Gonski-style needs based funding, with an extra $2.2 billion for schools over the next four years. As a result, most schools will receive greater attention under what is being dubbed, “Gonski 2.0”.
- Working parents with young children. An additional $37.3 billion is to be injected for almost one million Australian families utilising before and after school care programs, to ease the burden of such childcare costs.
- Persons living with disability. The NDIS will be fully funded and rolled out by 2020, paid for by an increase in the Medicare levy ranging from 0.5 to 2.5 per cent, depending on your tax bracket.
- Negative Gearing. Whilst the Government left the majority of negative gearing reforms off the table, it did tighten up what can be claimed under the system – specifically travel expenses and depreciation deductions.
- University students. As announced last week, tertiary education fees are set to rise by 7.5 per cent, with students now expected to pay back fees at a lower salary threshold.
- Catholic schools. While public schools will benefit from the re-direction of funding for education, some wealthy independent school goers may be faced with higher fees, with reduced funding expected over the next ten years.
- Wealthy families. There was no mention of increases to the family tax benefit, which means that families in the upper tax brackets may miss out on new income-tested payments.
We will be considering how best we can advise our clients, with regards to your individual circumstances, following further analysis of the measures proposed last night.