02 Apr Everyone’s A Winner Baby – 2019 Federal Budget
The Federal Budget that has a little bit of everything in it for virtually everybody (well unless you earn > $200,000 pa, are a Multi-National Corporation or are Unemployed). Scott Morrison could well be saying the following lines to Josh Frydenberg this morning (like Errol Brown from Hot Chocolate), but the thing is will they be around in 6 weeks time to deliver the outcome ?
Never could believe the things you do to me,
Never could believe the way you are.
Every day I bless the day that you got through
to me,
‘Cause baby, I believe that you’re a star.
Everyone’s A Winner Baby That’s The Truth (So True)
The Headline Results are: –
- Cash payments for Pensioners – $75 single, $125 couple
- Tax Rebates for Low to Middle Income Earners – average wage earners (those who earn $80,000 – $90,000 pa) will pick up an extra $1,080 in rebates, with marginal tax rates to be reduced in future years (expecting) to make these tax changes “permanent”
- From 2024/25 the 30% marginal tax rate to be extended to those people who earn up to $200,000 pa. It is expected then that 2 in 3 workers will pay a maximum rate of 30%
- About $100 Billion to be spent in regional areas & on road, rail & parking around train stations to ease congestion
- Tax Cuts for small to medium businesses
- Expanding the instant asset write-off to $30,000 and the scope for businesses with turnover up to $50m per year to claim this benefit allowing an extra 22,000 businesses who employ 1.7m Aussies
- Over $6 bn for regional areas to assist in drought and flood affected areas
- Anyone aged under 67 from 1/7/2020 will be able to contribute to super without working
- More money for health with increased funding for mental health and further drugs being placed on the PBS Scheme
- GP Medicare Rebate freeze to be lifted
- A return to a Budget Surplus which means Australia will actually be paying it’s own way out of it’s own income (if you can believe the numbers of course). Future surpluses will continue to be determined by the prices of iron ore & coal (our 2 major exports and income generators for the government). The “experts” that I watched on various TV Stations last night said that these Budget figures were believable and based on a iron ore price of $55 a tonne (compared to when Wayne Swan predicted 4 consecutive years of Budget Surpluses based on an iron ore price of $175 per tonne)
What Does It Mean ?
Virtually everybody is getting a little bit of something sometime over the next 3 years. More money in people’s pockets means more spending which is good for economic growth. Added to that businesses thinking of purchasing capital items will now have an extra incentive to do so. I can just see Gerry Harvey (Harvey Norman) & Solomon Lew (Peter Alexander, Just Jeans, Portmans, Dotti, Smiggle, etc.) & John Gandel (Shopping Centres) rubbing their hands together as a lot of this cash is sure to find it’s way into their coffers.
What has gone unnoticed though is that Australia keeps it’s AAA rating which is very important to the country. Without the AAA rating the cost for us to raise capital will increase
Please note that these are my own general personal thoughts (Richie Parsons) and do not necessarily represent those of my licencee LWP Financial Pty Ltd T/As Blueprint Advisor Group, nor do they represent any form of personal financial advice.