Noel Whittaker’s take on the Budget

YourLifeChoices asked our favourite personal finance wizard Noel Whittaker for his views on how older Australians fared in the Budget.


The world has suffered the worst financial crisis in history, and everybody can be expected to share the pain. Huge deficits now, which are inevitable, will severely impact the ability of future governments to boost any kind of spending. Thankfully, our franking credits are still safe.

There weren’t a great number of initiatives for retirees, except for a $500 special bonus for people on the Age Pension. But a major plank of the Budget was to get business back to profitability, which, hopefully, should see dividends restored to retirees.

But having said that, the proposed amendments to the granny flat rules will be welcome. Under the existing regulation, the creation of a granny flat right could attract a large sum in capital gains tax. The government has promised that legislation will be passed to make the rules much fairer from 1 July 2021.

Just keep in mind that the legislation has to be passed to be effective.

The aged care segment is under huge pressure, and both government and older Australians have a preference for people to age at home. But this does require home care, and the waiting list for home care is about 60,000.

The Budget promised 23,000 extra places over four years, but only 2000 of these are level 4. The changes are welcome, but realistically, it’s just a drop in the ocean.

One initiative was aimed at large superannuation funds, but also has the potential to affect older Australians.

From 1 July 2021, the Australian Prudential Regulation Authority (APRA) will conduct benchmarking tests on the net investment performance of MySuper products to make it easier for members to compare the fees and performance of funds in the market.

That will create more competition, lower fees and lead to the demise of some funds that have been under-performing for decades.

Funds that fail two consecutive annual underperformance tests will not be permitted to accept new members until a further annual test shows they are no longer underperforming.

By 1 July 2022, the annual performance test will be extended to other superannuation products. As yet there is no detail, but one could expect that self-managed superannuation funds will fall under this umbrella. That would be a great outcome.

Many self-managed super funds often way underperform – because their trustees are not skilled at investing or because they haven’t got a clue about how to measure their own funds’ performance.

In terms of what was missed in the Budget, the most at risk in the community are people, mostly women, aged over 65 who do not own a home and who are forced to survive on the Age Pension while paying rent. Some of these end up on the street. Affordable housing would have been a welcome initiative to help some of these people reclaim their lives.

Do you agree with Noel’s analysis? What else was missing in the Budget?

Noel Whittaker is the author of Making Money Made Simple and several other books on personal finance. You can learn more at

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Written by Noel Whittaker


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