The Treasurer handed down Budget 2018-19 at 7:30pm on Tuesday 8 May 2018 at the parliament house with prime minster and foreign minister among the heavyweight guests. ACEC was also on the guest-list and attracted lots of attention.
This year’s Budget has an emphasis on retirement planning and contains several important considerations which may affect both retirees and pre-retirees, explored further below.
It’s important to note that at this point in time, these proposed measures are not yet law and may be subject to change.
The Australian Government budget sets out the economic and fiscal outlook for Australia and includes expenditure and revenue estimates for the current financial year, the budget year and three forward financial years. It shows the Government’s social and political priorities and how the Government intends to achieve these.
A stronger economy to benefit all Australians
The Australian economy continues to strengthen, and is shaking off the downturn in mining investment. Under the Government’s economic plan, jobs are being created, investment is rising and the budget is strengthening – enabling the Government to guarantee the essential services Australians and their families rely on.
This Budget is about building on that plan to ensure the benefits of stronger economic growth can continue to be secured and shared.
It is a plan that will provide tax relief to encourage and reward working Australians, back businesses to invest and create more jobs, guarantee the essential services that Australians rely on and keep Australians safe, all while ensuring the Government lives within its means.
Providing tax relief to encourage and reward working Australians
While the economy is continuing to strengthen and the budget position is improving, many Australians are experiencing cost of living pressures.
Tax relief for low and middle‒income earners is the first priority of the Government’s seven‒year plan to make personal income tax in Australia lower, fairer and simpler.
By 2024‒25 around 94 per cent of taxpayers are projected to face a marginal tax rate of 32.5 per cent or less compared with 63 per cent if we leave the system unchanged.
Backing businesses to invest and create more jobs
The Government’s national economic plan is delivering a stronger economy, record jobs growth and a recovery in non‒mining business investment. To continue that growth, it is important to stick to the plan.
The benefits of a job, an income, a wage and reward for effort are all reliant on a strong economy.
The Government is driving economic growth by legislating tax cuts for all businesses, prioritising small to medium businesses, delivering infrastructure that supports industries and jobs, and targeting incentives to promote research, development and new technology. This will make our businesses more competitive so they can grow and hire more Australians.
To secure Australia’s future, our economy must continue to adapt. We must build on our capabilities in science and technology to ensure that Australians are not left behind.
Guaranteeing the essential services that Australians rely on
A strong economy guarantees the essential services, like Medicare, schools, hospitals, disability services and aged care.
The Government will continue to ensure that all Australians have access to high–quality, affordable essential services at every stage of their lives.
This Budget includes record funding for hospitals and schools, a comprehensive approach to aged care so older Australians are encouraged to live life to the full, and guaranteed funding for disability services.
Keeping Australians Safe
The Government is keeping our communities safe from those who seek to do us harm by strengthening security at Australian airports and enhancing intelligence capabilities in response to a challenging and complex security environment. The Government is also protecting our unique natural environment with smarter biosecurity systems and continuing to protect and safeguard our borders.
Ensuring the Government lives within its means
This Budget represents the sixth successive update where the underlying cash balance is projected to reach a surplus in 2020‒21. Through sustainable budget management, for the first time in a decade the Government is no longer borrowing to pay for everyday expenses. This Government’s average real growth in payments is the lowest of any Commonwealth government in the last 50 years, while net debt will peak in 2017‒18 and turn the corner for further reductions.
Government borrowings will continue funding critical infrastructure and defence spending – key components of our national economic plan.
In recent years, ACEC has been invited to attend the annual budget night. ACEC Director Michelle Zhang leaded ACEC members to join the Federal budget night part at the parliament house on 9th May 2018.