The Federal Government delivered one of the most eagerly anticipated Budgets last night.
Given the magnitude of the Budget deficit, the Government did an exceptional job of managing the media and warning the public about the bad news in the weeks leading up to Budget night.
As is always the case with the Budget, everything is just a proposal until legislated.
From our perspective the key issues coming from the Budget include:
- The First Home Owners Grant will be extended to 31 December 2009 (the amount of the grant will be reduced by 50% for contracts entered into from 1 October to 31 December 2009).
- Tax Cuts to Remain (the Government has confirmed that previously legislated tax cuts will go ahead for the 2009/10 and 2010/11 financial years. No additional tax cuts were announced in this Budget).
- Superannuation Concessional Contribution Limits reduced by 50% (these will be halved to $25,000 per annum and $50,000 per annum - for those individuals aged 50 and over any time during the transitional period).
- Government Superannuation Co-Contribution Reduced (this is a temporary reduction of the maximum Government contribution from $1,500 per annum to $1,000 per annum).
- Private Health Insurance Rebate Changes (from 1 July 2010 the Government will introduce a three tiered approach to determine the amount of private health insurance rebate payable to individuals. The rebate cuts out completely for high income earners, being $120,000 for singles and $240,000 for couples).
- Medicare Levy Surcharge Changes (to ensure that middle and high income earners do not abandon their private health insurance, the Government has introduced variable rates of Medicare Levy surcharge).
- Age Pension Increases (from 20 September 2009 there will be an increase to the base rate for single age pensioners of $30 per week. There will be an increase to the pensioner supplement of $2.49 per week for singles and $10.14 per week (combined) for couples).
- Increase to the Qualifying Pension Age (the qualifying age for the Age Pension and Commonwealth Seniors Health card will increase for both men and women to 67 from 2023. The transition will not commence until July 2017, when the qualifying age will increase by 6 months every 2 years).
For more information please contact us on 1300 856 338.