Personal income tax

• Increases in the low and middle income-tax offset to apply in 2018-19. This benefit is quantified as $1,080 p.a. for individuals and $2,016 p.a. for a couple.
• Other tax benefits (tax rates/thresholds and low-income tax offset changes) to commence in 2022-23 and later income years.

Business owners

• Extension of the provision allowing small business to instantly write-off asset purchases increasing the per-asset threshold from $25,000 to $30,000 effective 2 April 2019.

Superannuation

• Work Test changes. From 1 July 2020, Australians aged 65 and 66 will be able to make voluntary superannuation contributions, both concessional and non-concessional, without meeting the Work Test.
• Spouse contributions. The maximum age at which a spouse contribution may be made is to be increased from 69 to 74.
• The age at which two future year bring-forward of superannuation Non-Concessional Contributions (NCC) is increased from 65 and 66 years of age to 30 June in the cut-off year.
• Tax relief for merging superannuation funds.
• ECPI administration simplification.

Social Security

• Energy Assistance Payment -The Government will provide $284.4 million over two years from 2018-19 to make a one-off Energy Assistance Payment of $75 for singles and $62.50 for each member of a couple eligible for qualifying payments on 2 April 2019 and who are resident in Australia.

Aged care

• Improving the quality, safety and accessibility of aged care services.

Government response to the Hayne Royal Commission

The government also announced funding increases financial services regulators ASIC and APRA because of the Hayne Royal Commission findings. These measures provide additional funding for designing an industry funded compensation scheme and increasing the resources of the regulatory authorities to implement the recommendations of the Royal Commission.

Interestingly the ALP immediately announced they would match these proposals, so it seems that regardless of the election outcome they will most likely be introduced.

There is certainly a grab-bag of pre-election incentives being offered by both political parties.

Some financial planning opportunities emerge from the budget announcements particularly around superannuation contribution changes which will provide opportunities for some superannuants. The changes to the work-test, spouse contributions and “bring forward” NCC rules for those turning 65 -66 over the next two financial years.

Whilst we absolutely support and applaud government support of the Hayne outcomes, we fear that firms like ours who act with integrity and have no claims history against them will be forced to contribute to the wrong-doings of those who would choose to break the rules. One can only hope that an element of fairness will apply.