Commentary sourced from knowITgroup Pty Ltd:
A federal Budget in an election year is subject to a degree of cautious interest. It is expected that the incumbent government will use the Budget to announce the fiscal policy they will take into their re-election campaign. However, unlike in non-election years, election year Budget proposals also stand a strong chance of not coming to pass should the incumbent government fail to secure re-election. It is through this uncertain lens that we view Treasurer Josh Frydenberg’s first federalBudget.Much conjecture in the lead-up to the early, April 2 Budget was around competing tax policies. Inthe 2018/19 federal Budget, the Coalition government outlined their seven-year personal income tax reform package. A cornerstone of the 2019/20 Budget is a further strengthening of the tax cuts legislated in 2018.These accelerated tax cuts are complemented by a number of superannuation tweaks that allow clients to contribute more to super, and for longer. A one-off social security energy assistance payment and some softening of the administrative requirements for SMSFs round out the night’sa dvice-related proposals.Unless two elections are held this year (one for the half-Senate and one for the House ofRepresentatives), the latest an election can be held is May 18, 2019. This means the Coalition government has a maximum of one joint sitting day to pass its Budget proposals before parliament is dissolved. This likely means that the majority of the Budget proposals are subject to an unknown Senate make-up, even if the Coalition wins a majority of lower house seats.Read the full summary here.
We are reviewing the impact on our clients’ arrangements of all proposals put forward in this budget.If you are affected and we recommend you make some changes, we’ll be in touch to let you know.And with a federal election looming, we are also keeping a keen eye on the promises being made by each party.We are currently developing strategies to help clients take advantage of any emerging opportunities, or to mitigate the effects of any changes that may negatively impact them. Whichever way the election pans out, we’ll be in touch with you if adjustments need to be made.If you have any questions about anything raised here, or your financial arrangements in general, please don't hesitate to contact us.This information is of a general nature only and is not intended as specific advice. Speak with your financial adviser to discuss your individual situation before taking action.