The 2019 Budget was unique in that it could be considered the unofficial start of the 2019 Federal election campaign. The election is expected to be held in mid-May, and throughout the forthcoming campaign period we can expect more policy detail released by both parties.

Below we have summarised the major elements of the government’s Budget announcement, and the Opposition’s response to these.

Small Business

• Instant asset write-off threshold increases to $30,000. Eligible businesses can write off multiple assets instantly

Opposition:

• Re-introduction of Sunday and Public Holiday penalty rates for staff
• Qualifying businesses to receive 20% immediate write-off of assets, rather than instant write-off of up to $30,000 as announced by current government

Income Tax

• There will be increases to the low and middle income tax offsets over the next 3 years
• From July 2024 there will be a reduction in the marginal tax rate from 32.5% to 30%
• Medicare Levy thresholds will increase
• General flattening of the income tax system between $48,000 and $200,000 income levels

Opposition (it can be argued that tax policy and superannuation are where the greatest contrast exists between the two major parties):

• Extension of the tax cuts to lower income earners under $48,000 p.a
• Same tax cuts as government for those earning between $48,000 and $126,000, and not for those earning more
• Negative gearing limited to new housing. Investment gearing to be abolished
• A reduction in the Capital Gains Tax discount from 50% to 25%
• Changes to the ability to receive a refund of excess franking credits when there is no tax liability

Superannuation

• From 1 July, 2020 if you are aged 65 and 66 you will no longer need to meet the work test to contribute to super. You can also use the bring-forward contribution rules to contribute $300,000
• The age limit on spouse contributions will increase from 69 to 75

Opposition:

• Reduction in non-concessional contributions limit to $75,000 per annum
• Restoration of tax deductibility of ad-hoc super contributions for self-employed individuals only
• Increases in the super guarantee to 12% to be accelerated
• Borrowing by Self Managed Super Funds (SMSF’s) to be prohibited
• Abolition of catch up contributions

Healthcare

• Indexation freeze on GP services under Medicare is to lift from July 1^st, 2019.
• Reduction in NDIS payments of $1.6B for 2019/20

Opposition:

• $2.3B cancer care package
• End the NDIA staffing cap, allowing more staff to work in NDIS as opposed to contractors

Education

• HELP debt for teachers working in regional communities to be extinguished

Opposition:

• 20,000 TAFE graduates to work as aged care workers for the NDIS
• $1B extra to be invested in TAFE

Aged Care

• $320m for a one-off increase to the basic care subsidy for aged care residents
• Extension of the Commonwealth Home Support Program (the CHSP is entry level support services and personal care at home). A further 10,000 home care packages to be released in next 5 years

Opposition:

• Appear to be broadly in favour of these changes

Social Security

• A one-off Energy Assistance Payment of $75 for singles and $62.50 each for couples to apply to anyone receiving a qualifying government payment. Originally this was not intended for Newstart recipients, but the government has already had a change of heart

Opposition:

• Also in favour of the Energy Assistance Payment

We will keep our clients updated if any further detail is released in the coming weeks that is particularly worth noting. As always, if you have any questions regarding items in the Budget please contact the TJL Accounting team in Forster on (02) 6554 9511 or Taree on (02) 6552 3233.