Education and housing affordability have dominated budget headlines in recent weeks and we’re starting to get a picture of what levers Treasurer Scott Morrison will pull, partly thanks to what’s been ruled out.
Last year’s surprise super changes had planners’ phones ringing off the hook the Wednesday following the announcement. While there may still be a few surprises in store, here’s a quick round-up of the measures that have been floated so far that may affect your clients.
Changes to negative gearing have been ruled out, but there are several other measures to improve affordability that we are likely to hear more about.
A bond aggregation scheme to encourage private investment in community housing is likely to be detailed on Tuesday, while a salary sacrifice-type proposal to allow first-home buyers to move allocated pre-tax income into savings has been heavily speculated upon. Letting prospective home buyers dip directly into super to buy property has been ruled out; however, there may be incentives for older Australians to downsize their homes to increase supply.
The Turnbull Government has made clear it’s looking at ways to end the cash economy, so we may see something on that on Tuesday night.
Work expenses are also under the spotlight, but some pundits have suggested the $20,000 instant asset write-off is being reviewed for extension. The 2 per cent levy for high-income earners has hit its expiration date and there are few indications it will be extended.
While it’s unlikely there will be many measures to discourage investment, the capital gains tax discount may be reduced.
While schools are set to get an additional $19 billion in funding over the next 10 years – which the government says will leave the vast majority better off – university students will have to pay an extra $3600 for a four-year degree. The income threshold for paying back higher-education debt will also be reduced, from almost $55,000 to $42,000.
Other measures that have been mooted include:
- An increase in infrastructure spending
- Greater attention to welfare allocation
- Changes to the Pharmaceutical Benefits Scheme
- An update on multinational tax avoidance
- New body for handling financial complaints, expected to be a hybrid of the Financial Ombudsman Service, the Credit and Investments Ombudsman and the Superannuation Complaints Tribunal.
Professional Planner will keep you updated about the federal budget as information comes to hand, with expert commentary and industry reaction.
TOPICS: capital gains tax, education, federal budget 2017, Scott Morrison, treasurer