Well if theatrics is what Australia needs, we received that last night when Josh Frydenberg delivered his budget speech. Some may interpret this as an election winning speech. We would have to agree with Jennifer Hewett’s (AFR) summation that this is a “Spendathon” that will see Australia’s Net Debt reach a staggering $980 billion by 2025. Much commentary has supported the budget for what it will do for the economy over the next 1 to 2 years. Our concern is what happens after that and when do we start to repay this burgeoning debt. Hopefully caution will prevail.
The younger generations will most certainly feel the effects of these budgets for many years to come. Enough of the doom and gloom, we see the highlights for many of our clients as follows:
Business and employers
- Full expensing of New and Second-hand assets for businesses with turnover less than $50 million extended to 30 June 2023. This is a huge benefit for anyone looking to accelerate their growth or replace some of your fleet.
- Modernising the residency tests to make it clearer to ascertain when someone is a resident or non-resident of Australia for tax purposes.
- $450 per month minimum income threshold for Super Guarantee removed – All employees will be paid super guarantee regardless of income for the month.
- The apprenticeship scheme will be uncapped and will represent a 50% wage subsidy.
- Work test (40 hours in 30 day period) for those age 67-74 repealed for non-concessional and salary sacrifice superannuation contributions. This will make contributing to super easier for some.
- Expanded access to downsizer contributions from a sale of the family home for certain circumstances.
- SMSF residency test relaxed for absences from Australia for up to 5 years.
Infrastructure spending continues to be a substantial part of Government expenditure throughout every state and territory.
The Government is again planning on spending their way out of trouble and this will continue to boost the Australian economy in many ways which is great for our current lives. We would call on this Government and any future Governments to look a little further ahead and map that out for all Australians. We will endeavour to help every client to take full advantage of all of the opportunities presented in this current budget whilst at the same time mapping an approach that meets your long term objectives.
As always if you’ve any specific questions feel free to reach out to our team.
Grant and Kelly