Budget Balancing Act
The problems that any Australian Government is expected to resolve and the wish list they are supposed to fulfil is extensive regardless of which party is in power.
As author John Lydgate wrote:
“You can please some of the people all of the time, you can please all of the people some of the time, but you can’t please all of the people all of the time.”
This Budget delivers a series of measures to attempt to please as many people as possible. It tackles the issues currently in focus across the Australian community – gaps in healthcare, first home ownership, foreign workers, investment and bank accountability to name a few of the pressure points. It also delivers an economic ‘sugar hit’ in the form of $75 billion in infrastructure projects.
Key measures include:
- Extension of the $20,000 immediate deduction until 30 June 2018
- Contractors in the courier and cleaning industries face greater compliance
- Access to small business CGT concessions tightened
- Banks slugged with ‘major bank levy’ increase to 60% for investments in affordable housing and Managed investment Trust investment opportunities in affordable housing
- Deductibility of investment property travel costs to end and restrictions on depreciation deductions
- A series of restrictions on foreign property investments
- Super concessions for over 65s to downsize – up to $300,000 per member
- The ability for would-be first home owners to salary sacrifice into super to save a deposit
Individuals and Families
- Medicare levy increase to 2.5% from 1 July 2019
- Help with energy bills for some social security recipients
- Demerit system for job seekers
- An array of housing affordability measures including a CGT discount
Overall the 2017-18 Budget will not offend anyone (except perhaps the banks) and there are plenty of giveaways. The only danger is the level of optimism in the economic projections in a climate of uncertainty.