It’s been a week since Treasurer Josh Frydenberg delivered the Federal Budget for 2019-20. So, who are the winners in this?
In this month’s blog, we thought that we’d highlight some of the proposed changes that may affect you, your family and your business.
The coalition has promised $100 billion over 10 years for new road and rail projects with QLD and VIC being the big winners.
VIC - $6.2 billion worth of projects including fast rail between Melbourne & Geelong.
QLD - $4 billion in new projects including Bruce Highway, Gateway Motorway & Warrego Highway.
Nationally - $500 million for commuter car parks to help improve access to key public transport hubs – getting more cars off the roads.
Small to medium businesses
Small to medium business owners have been given financial relief through the extension and increase of the instant asset write off. The threshold will be increased from $25,000 to $30,000 and extended for a further 12 months to 30 June 2020.
This measure has been extended to businesses with a turnover of up to $50 million, with the proposed changes taking effect from Budget night up until 30 June 2020.
Thinking of hiring an apprentice in an industry with skill shortages (eg, baking, bricklaying, carpentry and plumbing)? The Government is also proposing an $4,000 incentive to hire apprentices in these industries. In addition, apprentices will get $2,000 when they hit key milestones.
Changes to personal income tax rates
This is generally the area of the budget that sparks the most interest, as everyone wants to pay less tax and take home more of their hard-earned money. While this year’s budget only delivered small tax cuts, they won’t take effect until 1 July 2021.
Increase to the tax offset for low to middle income earners
The government has also proposed to more than double the low- and middle-income tax offset (LMITO), from up to $530 a year, to $1,080 a year. Eligible tax payers will be able to receive the benefits when they lodge their tax return for the current financial year.
Medicare Levy Threshold Changes
The Government proposes to increase the Medicare levy low-income thresholds to further reduce the tax burden on low income individuals and families:
Singles will increase from $21,980 to $22,398
Families will increase from $37,089 to $37,794
Single seniors and pensioners will increase from $34,758 to $35,418
Families who are seniors and pensioners will increase from $48,385 to $49,304.
For each dependent child or student, the family income thresholds increase by a further $3,471, up from the previous amount of $3,406.
Retirees have also had a small win in this year’s budget. The main areas of relief are:
More space for aged care, including making improvements to the quality, safety and accessibility of residential and home care services.
Increased access to bring-forward contributions for 65- and 66-year olds - From 1 July 2020, individuals aged 65 or 66, will be able to take advantage of the three-year bring forward arrangements for after-tax contributions in a single financial year for after-tax contributions.
Assistance for welfare recipients – an immediate one of payment is proposed of $75 for individuals and $125 per couple for eligible welfare recipients to assist with their next power bill. This will include people on the following; Age Pension, Carer Payment, Disability Support Pension, Parenting Payment Single, the Veterans' Service Pension and Veterans' Income Support Supplement, Veterans' disability payments, War Widow(er)s Pension, and those receiving permanent impairment payments under the Military and Safety Rehabilitation and Compensation Acts.
It’s important to remember that Budget measures are statements of proposed changes and are not yet law. With an election due May 18th everything could change. We will keep you informed as these changes occur.
As always, if you have any questions or need assistance with anything at all, please don’t hesitate to contact us.
General Advice Warning – The information in this article is educational and general in nature. It does not take into consideration your personal financial or taxation information, goals and objectives. Please ensure you seek appropriate financial and taxation advice.
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