The Liberal-National Coalition will form government after a shock result in the federal election.
Now the question is: what are the election promises and what do they mean for your financial situation?
With every election, there is the inevitable discussion of tax and budget changes. It is completely understandable to be overwhelmed with the constant information and updates from the campaign trail. Now that the dust has settled after the weekend’s election, we have put together a quick overview of everything you need to know moving forward.
|Personal staged tax cuts||Stage 1: From 1 July 2018, the government gave a tax cut to 3 million people by increasing the 32.5% tax bracket from $87,000 to $90,000.|
Stage 2: From 1 July 2022, the 19% tax bracket will increase to $45,000 from the current $37,000.
Stage 3: From 1 July 2024, the 32.5% marginal tax rate will be reduced to 30% for income between $45,000 & $200,000.
Stage 4: From 1 July 2024, taxable income that exceeds $200,000 will be taxed at 45%.
|Personal Income tax offset||Workers earning up to $37,000 will receive a tax cut of $350. For those earning between $37,000 and $48,000 the offset will increase to $1,080.|
|Increase Medicare levy threshold||Increase the Medicare levy threshold so that taxpayers generally continue to be exempted from paying the Medicare levy.|
|Small Business tax cuts||Company tax rate for small and medium businesses will be cut to 25% by 30 June 2022.|
Sole traders will receive a small business tax discount rate of 16% by 30 June 2022.
|ABN Holders||All ABN holders are required to lodge a tax return, even if nil, from 1 July 2021 and must confirm their business details with the Australian Business Registry from 1 July 2022.|
|Division 7A changes delayed||There are changes to shareholders, associates and directors that borrowed money from a company. These changes will be delayed until 1 July 2020.|
|First home buyers deposit scheme||The scheme will give first home buyers better access to finance without having to save a 20% deposit. The scheme will be available to eligible first home buyers who are able to save at least 5% and earning up to $125,000 or $200,000 for couples.|
|Superannuation changes||From 1 July 2020, the government intends to increase the work test age limit to 66, so that members can continue to contribute to super.|
From 1 July 2020, the super spouse split contribution age limit has increase to 74, provided they meet the work test.
Extending the number of members in a fund from 4 to 6.
Allowing contributions into super from the proceeds of downsizing, up to $300k per member aged 65 and over.