Author Topic: Aus Federal Budget 2016/17  (Read 9011 times)

marty998

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Aus Federal Budget 2016/17
« on: May 03, 2016, 04:19:03 AM »
I get a tax cut of $315. Whoopde do. The old Sandwich and Milkshake trick is back again :)

Lots of changes to Super this year. Non-concessional lifetime cap of $500k being introduced (no more $180k a year, everyear)

Concessional limit reduced to $25k per year.

Government hiring 1000 ATO staff to crack down on multinational tax avoidance. This is after they cut 3500 staff in the 2014 budget...

How does the budget impact you?

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Re: Aus Federal Budget 2016/17
« Reply #1 on: May 03, 2016, 04:49:56 AM »
Hi Marty, was wondering if you were going to do a budget highlights thread again.  I'm not listening so will have to look it up…heard there would be tax cuts and changes to super.

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Re: Aus Federal Budget 2016/17
« Reply #2 on: May 03, 2016, 05:09:29 AM »
Meh, no good news for me.  A minor tax cut, but concessional super cap dropped to 25k. No mention of a higher rate for us oldies, so that 10k lost at the concessional rate :(.  All the nice ideas like letting women catch up on the concessional rate if they have babies don't apply because I'm too old.  (Yes I missed out on the baby bonus too).  No joy for us olders trying to play catchup with super.

And the RBA dropped the cash rate again.  Its a black day for savers.

AliEli

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Re: Aus Federal Budget 2016/17
« Reply #3 on: May 03, 2016, 05:38:37 AM »
It seems like a confused, and confusing, budget.  There doesn't seem to be a long-term vision in it.

marty998

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Re: Aus Federal Budget 2016/17
« Reply #4 on: May 03, 2016, 05:54:08 AM »
It seems like a confused, and confusing, budget.  There doesn't seem to be a long-term vision in it.

It's the budget you put together when you don't really have any policies.

Don't mind the Super measures, even though they will probably be a negative for me down the track.

I'm peeved about the deficit though... the debt is still rising and there's no real path to get back to surplus. Not enough people and corporates pay enough tax to fund the services people want.

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Re: Aus Federal Budget 2016/17
« Reply #5 on: May 03, 2016, 06:03:51 AM »
Yes I agree. No overall vision, and nothing realistically aimed at the budget deficit, at least nothing that sounds convincing to me.

AliEli

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Re: Aus Federal Budget 2016/17
« Reply #6 on: May 03, 2016, 06:40:44 AM »
It's not a budget, it's a "National Economic Plan for Jobs and Growth".

ScoMo is the artist, and he had named his work.  Is anyone else dreading the election? :(

potm

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Re: Aus Federal Budget 2016/17
« Reply #7 on: May 03, 2016, 06:54:19 AM »
Massive changes to super, did not expect something like this from a liberal party. I agree with the changes in principle, especially that it is made retrospectively on the 1.6 mil limit.
Will probably hurt me down the track though. I'm surprised on the 500k limit though, seems overly harsh. Won't allow for a big contribution from downsizing a house or selling a business. I guess the deductible concessional contributions until 75 without restrictions make up for it.
The 5 years rollling concessional limit is interesting though. Still to be seen how it is implemented exactly.

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Re: Aus Federal Budget 2016/17
« Reply #8 on: May 03, 2016, 03:44:16 PM »
I like the 1.6mill limit too, thought that was quite clever - not sure just how many people have that or more in their pension phase but there you go. I'm also waiting for the details of the 5 year rolling concession since I am pretty sure 5 years ago I wasn't making much extra contribution, so maybe I can play catchup. I agree the 500k limit is a bit harsh, I always thought there might be something like that but thought it would be more like a mill. Maybe they are viewing it from a couple point of view.

Lets face it the legislation will be amended to say the purpose of super is to "replace or supplement" the Old age pension….so  in the longer term, not too much tax concession beyond 500k/person.

potm

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Re: Aus Federal Budget 2016/17
« Reply #9 on: May 03, 2016, 06:16:48 PM »
The 5 year roll forward will only start accruing from next year unfortunately. 

marty998

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Re: Aus Federal Budget 2016/17
« Reply #10 on: May 04, 2016, 03:18:02 AM »
There is a new program in there to replace work for the dole. I didn't look too far into the details.

I doubt the cigarette tax will raise as much as they think it will. People will start to go the black market route I reckon... if a pack of 25 is going to cost $40 the hit to the hip pocket will be too high for many.

Could blow another hole in the bottom line.

There is also going to be a crackdown on Disability Support Pensioners... 30,000 a year will be reviewed and supposably taken off the DSP.

Still trying to figure out what the point of this budget is... when you've got $2 trillion to spend over 4 years and you can only identify a billion here or a billion there in savings and spending initiative you have to wonder what the point of it all is.

alsoknownasDean

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Re: Aus Federal Budget 2016/17
« Reply #11 on: May 04, 2016, 04:42:50 AM »
Still trying to figure out what the point of this budget is... when you've got $2 trillion to spend over 4 years and you can only identify a billion here or a billion there in savings and spending initiative you have to wonder what the point of it all is.

Re-election?

IMO it's a 'safe' budget, intended to ensure electoral survival.

You wouldn't expect them to introduce a budget in the style of 2014's in an election year, would you?

marty998

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Re: Aus Federal Budget 2016/17
« Reply #12 on: May 04, 2016, 05:43:36 AM »
I would have expected at least 1 initiative that you could identify as being "yup, a Turnbull government did this".

Howard had the GST, family tax benefits, several large income tax cuts, sale of Telstra, Future Fund etc etc
Rudd had the GFC stimulus packages, school halls, NBN.
Gillard had the Carbon Tax/Pricing, NDIS, Gonski education funding
Abbott had.... err.... temporary deficit levy on high income earners
Turnbull has....submarines designed today, to be built by 2050 when the technology is redundant?

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Re: Aus Federal Budget 2016/17
« Reply #13 on: May 04, 2016, 05:47:39 AM »
The 5 year roll forward will only start accruing from next year unfortunately.

:(

I would have expected at least 1 initiative that you could identify as being "yup, a Turnbull government did this".

Abbott had.... err.... temporary deficit levy on high income earners

Abbott had boyish pursuits such as budgie smugglers and skulling schooners at the back of the room when he thought no-one was looking…...

marty998

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Re: Aus Federal Budget 2016/17
« Reply #14 on: May 04, 2016, 05:56:50 AM »
Oh... Abbott had the Paid Parental Leave thing that never got up.

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Re: Aus Federal Budget 2016/17
« Reply #15 on: May 04, 2016, 05:58:40 AM »
O yes, another policy he won't be remembered for.

alsoknownasDean

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Re: Aus Federal Budget 2016/17
« Reply #16 on: May 04, 2016, 06:07:12 AM »
Medibank Private sale? China FTA?

Although I think if you asked him what his greatest achievement was, the answer would involve the word 'boats'.

potm

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Re: Aus Federal Budget 2016/17
« Reply #17 on: May 07, 2016, 10:13:07 PM »
I think the changes to super are quite significant, undoing what Howard did in the boom years.
Abott was also about no changes to Super haha, I can ser a lot of people voting based of that would be quite annoyed now. Although it's not like Labour would leave it alone either.
They need to set the rules for it and lock it in, such drastic changes every few years is a joke.

Donna B

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Re: Aus Federal Budget 2016/17
« Reply #18 on: May 10, 2016, 12:51:38 AM »
I agree with you Potm. They keep telling us to plan for retirement, but how do you do that when they keep changing the rules?

It is the $25,000 yearly cap that will effect me the most at the moment. They say it only effects about 4% of the population but i work with a number of people near retirement age that are utilising this strategy. That 4% of the population might be at any one time, but I think it would be higher if taking into account a person's lifetime approach to super. What you can contribute will depend on where you are in life. Those just entering the work force, or buying their first home or raising kids aren't likely to be in a position to pay the maximum into their Super and would make up a significant portion of the 96% not maximising their pretax limits. Once these things are behind you and retirement looms closer then paying more into retirement accounts to set yourself up becomes more urgent. It is those in the last decade of their working lives that need Super incentives. Shouldn't the government be pushing strategies so that people are less reliant on the aged pension, or that encourage people to remain in the workforce? I personally think they should have kept the $35,000 level for the 55's plus. 

What about inflation? $25,000 in even 10 years won't be much, and a $500,000 lifetime cap or $1.6 million by the time I'm 65 (in 25 years) will be bugger all. What happens to those whose partner's die shortly after retirement, where do you put their Super money if you can no longer deposit it in yours? 3 multi million waterfront houses came up for sale near me last week I imagine hoping to catch those who need to remove money from super or because of their exempt PPOR status.

These latest figures will no doubt change multiple times over the years which will give the impression of Super being an unstable investment choice.
« Last Edit: May 10, 2016, 12:54:11 AM by Donna B »

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Re: Aus Federal Budget 2016/17
« Reply #19 on: May 10, 2016, 01:54:13 AM »
Yes I wrote a post pretty similar to this but the puter ate it. Many 55 pluses won't have a lot in super and the loss of the 35k cap is a pain. I guess there will be some sort of indexation for the limits, but who knows.

Abundant life

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Re: Aus Federal Budget 2016/17
« Reply #20 on: May 12, 2016, 04:28:08 AM »
For what it's worth I was just reading this article:

http://www.switzer.com.au/the-experts/paul-rickard/super-changes-have-a-long-way-to-run/

I thought this quote might be pertinent to some of you, although it doesn't apply to me:

'Super actions to take now

Although the fate of the legislation won’t be known for some months, there are some super actions you should take now. Firstly, continue making contributions up to the present concessional cap, $30,000 if aged 49 or younger this year, or $35,000 if aged 50 or older this year. You have about 6 weeks remaining. And you can do this again next financial year.'

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Re: Aus Federal Budget 2016/17
« Reply #21 on: May 12, 2016, 05:56:36 AM »
I certainly will be, and then I will have only 1-2 years more contributions to make whilst working, so its not such a huge loss to me.  My super is not a huge amount but its certainly better than lot of folks my age ..I know many people playing catchup once the mortgage is paid off and the kids have moved out…they will miss the 35k cap for a decade or so.

alsoknownasDean

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Re: Aus Federal Budget 2016/17
« Reply #22 on: May 12, 2016, 06:15:14 AM »
I'd assume that much of what this budget includes would need to be passed by Parliament, right?

It won't be this financial year, now that they've dissolved parliament and are in campaigning mode.

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Re: Aus Federal Budget 2016/17
« Reply #23 on: May 12, 2016, 04:45:43 PM »
Yes thats right and from what I know the article that Abundant life posted is correct - it won't be passed ( if it is) until into the next fin year, so the earliest it can be introduced will be the beginning of 17/18 fin year. 

Personally I'll save that money whether in or out of super, but I'll lose about$4000k of tax savings since it won't be concessional.