Federal Budget 2018/19

Here’s a roundup of some of the key proposals put forward in Tuesday night’s Federal Budget.

Take a look at how they might affect your financial goals — whether you’re starting out in your
working life, building a career, having a family, or moving toward or living in retirement.

Remember, at this stage, these are just proposals and not yet law, which means things could change
as legislation passes through parliament.

Personal tax

  • Changes to the personal income tax plan announced in last year’s Budget, including:
    • more than doubling the maximum amount of the Low and Middle Income Tax Offset  which will apply to the 2018-192019-20, 2020-21 and 2021-22 income years
    • from 1 July 2022, increasing the top threshold of 19% from $41,000 (as currently legislated) to $45,000
    • from 1 July 2022, increase the Low Income Tax Offset (LITO) from $645 (as currently legislated) to $700, and
    • from 1 July 2024, lowering the 32.5% tax rate to 30% (which will apply to taxable income between $45,000 and $200,000).
  • Increase the Medicare levy low-income thresholds for singles, families, and seniors and pensioners from the 2018-19 income year in line with the Consumer Price Index.
  • One-off Energy Assistance Payments of $75 for singles and $125 for couples for certain eligible recipients of Government support payments, to be paid this financial year.

BUSINESS

  • Instant asset write-off increased to $30,000 for businesses with turnover up to $50 million
  • Additional support to financial regulators in the wake of the Banking Royal Commission
  • 80,000 new apprenticeships

INFRASTRUCTURE

  • Urban Congestion Fund increases four-fold to $4 billion
  • $2 billion for fast-rail between Melbourne and Geelong
  • $2.2 billion for safer roads
  • $1 billion to improve freight routes and access to ports

THE BUSH

  • $6.3 billion in drought support
  • $3.3 billion for those affected byflood
  • $3.9 billion Emergency Response Fund for natural disaster recovery efforts

SCHOOLS

  • $300 billion for upgrades to libraries, classrooms and play equipment
  • Scholarship program for 1000 students to study in regional Australia
  • $453 million to extend pre-school education

RESEARCH

  • $9 billion for science, research and technology
  • $400 million for genomics research to unlock the secrets of DNA

HEALTH

  • $80 billion for better access to life-changing equipment, services and medicines
  • $461 million for youth mental health and suicide prevention strategy
  • $528 million for a Royal Commission into the mistreatment of people with disability, including counselling and support
  • $160 million for research to improve the health of Indigenous Australians

AGED

  • $725 million for 10,000 new home care packages
  • One-off Energy Assistance Payment for pensioners of $75 for singles, $125 for couples
  • $84 million for carers to leave a loved one in safe hands and take a break

SECURITY

  • $328 million to fund prevention, response and recovery initiatives
  • $570 million for the Federal Police and ASIO
  • Additional $680 million to support service men and women deployed abroad

ENVIRONMENT

  • $3.5 billion Climate Solutions Package including emission reduction activities
  • $100 million Environment Restoration Fund

Superannuation

  • Remove the work test for superannuation contributions for individuals aged 65 and 66 from 1 July 2020. This will align the Work Test with the eligibility age for the Age Pension, which is scheduled to reach 67 from 1 July 2023.
  • Additional funding of $42.1 million over four years to the Australian Taxation Office (ATO) to increase activities to recover unpaid tax and superannuation liabilities, with a focus on larger businesses and high wealth individuals.
  • Provide permanent tax relief for merging superannuation funds from 1 July 2020 (the current temporary measures are due to expire on 1 July 2020).

Once again remember, at this stage, these are just proposals and not yet law, which means things could change
as legislation passes through parliament.