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Federal Budget

Federal Budget wrap up

JTB Studios
Private Client Adviser
15 May 2014

On Tuesday evening, Federal Treasurer Joe Hockey handed down the Federal Budget for financial year 2014-15

The Government has stated this Budget is necessary to protect future living standards and prepare Australia for an ageing population. This budget is set to reduce deficit from $49.9b this financial year to $29.8b next financial year and to $2.8b in 2017-18.

Key points from the budget:

  • 2 per cent Deficit Tax will apply to individuals in the top marginal tax rate with annual incomes of $180,000 or more, to raise $3.1 billion over three years
  • Increase to the Superannuation Guarantee (SG) beyond 9.5% has been delayed until 2018
  • Pension age will increase  to 70 by 2035
  • $11.6b to be spent on road, rail and port infrastructure
  • $7 co-payment to visit a General Practitioner or out-of-hospital pathology and diagnostic imaging services from 1 July 2015, with $5 directed to a new Medical Research Future Fund
  • Fuel excise to be indexed from August 2014 to raise $2.2 billion over four years

Of particular note to the superannuation industry is the abolition of the excess contributions tax. From 1 July 2013 if a superannuation member exceeds their non-concessional contribution limit they will have the option to withdraw the excess amount, plus earnings, without incurring penalty tax. We view this as a step in the right direction as the penalty was quite harsh.

While there is no doubt this budget is tough, it goes a long way to getting the economy back to surplus over the coming years.

Hewison Private Wealth is a Melbourne based independent financial planning firm. Our financial advisers are highly qualified wealth managers and specialise in self managed super funds (SMSF), financial planning, retirement planning advice and investment portfolio management. If you would like to speak to a financial adviser on how you can secure your financial future please contact us 03 8548 4800, email info@hewison.com.au or visit www.hewison.com.auPlease note: The advice provided above is general information only and individuals should seek specialised advice from a qualified financial advisor. The views in this blog are those of the individual and may not represent the general opinion of the firm. Please contact Hewison Private Wealth for more information.