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.
- 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.