Each year, YourLifeChoices is privileged to attend the Federal Budget Media Lock Up. This enables us to report immediately on the Budget measures that affect you, our 250,000 members.
Housing affordability is shaping up to be a major focus for Treasurer Scott Morrison in the Federal Budget 2017–18, but exactly how he will tackle it and whether any measures will assist older Australians struggling to afford housing on a limited income remains to be seen.
Here’s our breakdown of the issues that most affect older Australians and what, if anything, we can expect to change.
Superannuation – after the changes that were pushed through last year and will take effect from 1 July this year, expect little change in superannuation. An extension of the freeze on the superannuation contribution guarantee is a possibility, but with the rate having been frozen at 9.5 per cent since 2014, this wouldn’t be a popular move.
Age Pension – after the implementation of the 1 January 2017 asset threshold changes, there seems to be little more the Government could do to restrict access to the Age Pension. However, let’s not forget that while the family home has indeed remained an exempt asset, much like the $1.6 million limitation that a person can hold in a retirement account, a threshold on the value of the family home isn’t too much of a stretch.
GST – along with negative gearing, it’s one of the issues that just won’t go away for the Government. In its latest research, the Grattan Institute once again advocates the benefit to the budget of raising the rate from 10 per cent to 15 per cent. In previous research, it suggested any increase could be offset by spending 30 per cent of the new revenue raised to increase the base rate of welfare payments and thus limit the adverse effect on low-income households.
Negative gearing – depending on which side of the property fence you sit, this could either be the solution to housing affordability and tax revenue increases or it could finally ‘pop’ Australia’s property bubble. Either way, as each successive budget fails to address the issue in any way, the calls for action will grow louder.
Capital Gains Tax – although the Government has refuted claims that tax concessions on capital gains tax are for the chopping block, the suggestion that we will see the concession cut from 50 per cent to 25 per cent in the May Budget won’t go away. With Finance Minister Mathias Corman stating on 17 February that the Government had “no intention” of cutting the concession, it would be one very large and very swift backflip.
Income tax – with company tax cuts in limbo, personal income tax could be a potential revenue raiser. Due to end this financial year is the Budget Repair Levy paid by high earners on income over $180,000 at a rate of an additional two per cent. As few people are seemingly up in arms, there’s every possibility that this could be extended. Also, keep an eye on the Medicare Levy that could also be increased to fund Australia’s health services.
Of course, there are many more measures that the Government could be considering to try and wrestle control of the Budget. Are there any you would like to see announced? Do you think any of the above should or will be considered? Is there a particular measure that would really hit your personal budget?