Confirming what we already suspected, tax changes will be the cornerstone of Budget 2016/17, with reduced superannuation tax concessions for the wealthy the big issue.
Without revealing the details of how superannuation tax concessions will change, Treasurer Scott Morrison yesterday said, “We’ll be ensuring that we better target the concessions that are there in superannuation, we’ve said that for some time.
“I don’t think there’s any great secret about that, the details of those things we’ll deal with on Tuesday night.
“But it’s important that we get these incentives right because superannuation is so important for Australians and for their future and we need to make sure that those concessions are well targeted.”
With negative gearing changes and an increase to GST already ruled out, targeting tax concessions on superannuation is one of the few remaining mechanisms for balancing the budget.
And while the wealthy may take a hit on their superannuation concessions, those earning over $80,000 are expected to see a reduction in the rate of income tax they pay. An increase to the level of income at which the second highest-tax bracket kicks-in looks to be on the cards.
Businesses could also see some relief with the company tax rate under review, although any changes are expected to be over the long term.
Speaking to Sky News yesterday, Prime Minister Malcolm Turnbull said that the budget would be a “fiscally important document” that would form “a new agenda” to take to the election.
“This is not Tony Abbott’s plan, this is the plan of the Turnbull Government,” Mr Turnbull said.
“It is a plan to ensure jobs and growth and a sustainable tax system, and the restoration of the budget to balance, bringing those deficits down in a managed and measured way so that we … live within our means.”
And it looks as though any changes to the GST are off the cards for the next few years if the Coalition Government is re-elected, with Mr Turnbull promising it would remain untouched in the next parliamentary term.
Read more at ABC.net.au
Tomorrow I’ll head to Canberra to hear firsthand the Treasurer’s plans for the fiscal future of the nation. However, as most of the details of the Budget 2016/17 have already been released, is there any need for all the pomp and circumstance that surrounds the announcement?
We’re heading for an election that we know, so perhaps we should expect any proposed changes to be made under Budget 2016/17 to be ‘leaked’ so that public opinion can be gauged before anything is set in stone. Learning from the mistakes of the Joe Hockey/Tony Abbott budget of 2014, where the Age Pension was to undergo a planned massacre, and in common with the 2015 Budget, the major policies of this year’s are already known.
Of course, the devil is in the detail. Thanks to pre-budget spruiking, the announcement in Budget 2015/16 that the thresholds and taper rate applied to the asset test for the Age Pension would change came as no shock thanks to pre-budget spruiking. However, the extent to which people’s Age Pensions would be affected took many by surprise.
And this year, having gauged that there is little appetite amongst the wealthy for negative gearing changes and that the public is not open to an increase in GST, the Government has set it’s sights on changes to superannuation.
The calculations have been made, the papers are written and just about every economic expert has modelled the likely scenarios we can expect to see. So why not just tell us what the changes will be?
By 1.30pm tomorrow I will know the details, but thanks to an embargo, nothing can be released to the public until Mr Morrison takes to his feet in Parliament at 7.30pm and delivers his Budget 2016/17 speech. It will possibly be the most important speech of his political career if, as we expect, an announcement of a federal election comes hot on its heels.
So perhaps this year Mr Morrison deserves his moment in the spotlight, only time will tell.
Do you wait with anticipation for the budget announcement? Or do you think you already know what is coming and how you’ll personally be affected. Do you agree with reduced superannuation tax concessions for the wealthy? Should those earning over $80,000 see their income tax cut?