8th May 2018
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Federal Budget 2018-19 wrap-up for older Australians
Author: YourLifeChoices
Federal Budget 2018-19 wrap-up for older Australians

Treasurer Scott Morrison’s third Federal Budget contained few surprises, given the orchestrated leaking of its contents in the weeks prior.

In his 4pm press conference, Mr Morrison supported the Budget tagline, ‘A plan for a stronger economy’, emphasising the decrease in net debt in recent years and the projected return to surplus in Budget 2019-20.

The cornerstone of this Budget is income tax cuts in the low and middle-wage brackets, with a seven-year plan to reduce income tax rates and thus prevent bracket creep, which Mr Morrison believes is a disincentive to earn more.

Budget 2018-19 has also been called a ‘Baby Boomer budget’, but this is lazy shorthand for a handful of initiatives that do little to address the widening gap between the ‘haves’ and ‘have nots’ in retirement in modern day Australia.

Also under the radar is the ‘zombie’ measure (left over from Budget 2014-15) to raise the Age Pension age to 70 by 2035. When we asked the Treasurer if this measure was still on the table, he was reluctant to respond, instead highlighting the provision of residential aged-care places and home-care packages. When the question was repeated, he said: “Yes, this is still government policy.”

The Treasurer was confident the current high debt levels will steadily drop and the Budget will return to surplus by 2019-20.

Yes, this year has seen a spike in tax revenue, much from company tax receipts (some say as a result of delayed tax write-offs post Global Financial Crisis). There appears to be little evidence that this bonanza will continue next year, or in those following. But the income tax cuts are a ‘package’ that must go forward – at a cost of $140 billion over a 10-year period.

In essence, there are seven key Budget initiatives that will affect older Australians.

They are:

  • Pension Loans Scheme expansion
  • Pension Work Bonus increase
  • Work test exemption for those aged 65 to 74
  • Moves to counter age discrimination in the workplace
  • Funding for healthy ageing
  • More aged-care places and home-care funding
  • Lower super fees and new retirement income products.

Watch your inbox tomorrow morning for a full analysis of each of the above measures and how they will affect your retirement.

Ben and Kaye spent the day in Canberra at the lock-up to get the lowdown on what matters most for YourLifeChoices members. From 2pm, Ben and Kaye will be online at www.yourlifechoices.com.au to answer your questions on Budget 2018-19.





    COMMENTS

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    Kathleen
    8th May 2018
    9:58pm
    No way touching the borrowing on our home. You can lose your home. I was warned about any of these loans on your home years ago! If desperate, better to sell and try to find something cheaper if only by a bit to help with change in circumstances.
    sunnyOz
    9th May 2018
    9:04am
    Kathleen - agree. I have just had neighbors caught up in one of these messes. They are in their early 80's and had asked me my opinion a few years ago, to which I said no, but they went ahead. They have just had to sell their much loved home and move in to a tiny small unit, as the amount owed just blew way out. They now say it was a huge mistake. Older people do not really understand the full repercussions of these loans, just see the initial benefits. If it is the govt loaning you the money, can guarantee there will be strings. So borrow $50,000? - probably class it as an asset and lower your pension. No
    OnlyGenuineRainey
    9th May 2018
    6:41pm
    What a convenient cop out for a stinking government that refuses to pay fair pensions! Tell people to borrow against their home - at high interest - and use that money to compensate for an inadequate pension. Disgusting!
    OnlyGenuineRainey
    9th May 2018
    6:43pm
    Oh yes, and if you don't work you can contribute your mythical income - which of course you don't have - to super. There's no benefit, even if you did have money to contribute. In fact, it's likely to be detrimental in the long run, especially to people with lower super balances (who are they only ones allowed to use this strategy!).
    OnlyGenuineRainey
    9th May 2018
    6:43pm
    Oh yes, and if you don't work you can contribute your mythical income - which of course you don't have - to super. There's no benefit, even if you did have money to contribute. In fact, it's likely to be detrimental in the long run, especially to people with lower super balances (who are they only ones allowed to use this strategy!).
    OnlyGenuineRainey
    11th May 2018
    8:58am
    Well, it seems the LNP has done it again, though hopefully the worst of their budget BS will be blocked. 1% tax cut for the battling class and 60% for the rich! Rates for all incomes to be almost identical, except the rich will still claim their superannuation tax concessions, capital gains concessions, negative gearing rebates, etc. and use trust distributions and other devices so they pay next to nothing and the only revenue will be from the battlers who can't afford to pay tax, so more budget crisis. Assuming Labor wins power, it will be another fiasco of ''it's all Labor's fault''.

    Interesting that studies of history reveal that Australia's best growth periods were when taxes were high. That figures if you think about it. Higher taxes means more money to pump into the economy building infrastructure, paying pensions at a level that allows people to spend a little and stimulate business profits and jobs... Logic says higher taxes are better for the economy - provided they are fair and those being hit can well afford to pay them. Sad that our politicians are way too greedy to apply logic or common sense!


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