The budget – what is all the fuss is about?
There has been a lot of press over recent weeks regarding the budget. The difficulty is separating the fact from fiction from sheer scare mongering.
Obviously there are many changes made in a budget, some get lots of publicity and some not. Some are immediate, and some are enacted into the future.
Below is a brief summary of some of the more pertinent points that will impact on our clients.
- Introduction of Temporary Budget Repair Levy, whereby those earning above $180,000 will be subject to an increase in their marginal tax rate from 45% to 47%
- Future superannuation guarantee contributions increasing at a slower rate than was originally set, but still reaching 12% in 2022/23 financial year
- Refunding excess non concessional contributions, whereby excess contributions can be withdrawn and taxed at your marginal tax rate instead of being taxed at the top marginal tax rate. You can, however, choose to retain these within your fund and be taxed at the top marginal tax rate.
- Changing the indexation of some Centrelink payments now and some in 2017 from average weekly earnings to the lower CPI
- Changes around the Commonwealth Seniors Health Care Card
- Introducing patient contributions for doctor visits, pathology and diagnostic services of $7, with certain safety nets imposed
- Increasing co-payments and safety net thresholds under the PBS, whereby scripts will increase by $5 for general payments and $0.80 for concessional patients
- Age pension age increasing on a sliding scale, with those born after July 1952 being affected with the age pension age for those increasing to 65 years and 6 months through to those born after 01/01/1966 turning age pension age at 70.
It is important to understand that not everything in the budget may come to fruition – some recommendations will be legislated, some will not, and some will appear in a different format or with amendments.
The key to all of the above is in the detail which in many areas takes time to come out.
Then take the time to ask questions and seek clarification where necessary. Then plan, or alter your plan, accordingly.