Scott Morrison’s third budget is headlined by $140 billion in tax cuts over the next decade, immediate tax relief of up to $1,060 a year for middle-income households and a fundamental reform of the tax system.
2018 Federal Budget Summary
Key measures include:
From 1 July 2018
- Low and middle income earners are to benefit from tax savings of up to $530 per person (or $1,060 per couple).
- The Medicare Levy will remain at 2%.
- The $20,000 instant asset write-off for business with aggregate turnover less than $10m will be extended until 30 June 2019.
- Funding for home care services and residential aged care will increase.
From 1 July 2019
- A one year exemption from the ‘work test’ will apply to recent retirees who have less than $300,000 in total super savings.
- Life insurance can only be offered in super on an ‘opt-in basis’ to new members under 25 years of age or members with inactive accounts or an account balance under $6,000.
- Fees when exiting a super fund will be banned and administration/investment fees will be capped at 3% pa on accounts with balances of less than $6,000.
- The ATO will work to proactively reunite Australians’ dormant superannuation funds with their active account, with inactive balances less than $6,000 to be transferred to the ATO.
- The Pension Loans Scheme will be available to all Australians over Age Pension age and the maximum payments will increase to 150% of the full Age Pension.
Note: The measures outlined in this Federal Budget Summary are proposals only and may or may not be made law.
Read and view Godfrey Pembroke’s analysis below and find out what the 2018 Federal Budget means for you:
View the 2018 Federal Budget Analysis video with Gemma Dale, Director of Investor Behaviour, MLC below.
If you have questions regarding this year’s Federal Budget please contact us here.
Download the federal government 2018 budget Overview documents using the links below.
- Budget Overview – A plan for a Stronger Economy.
- Stronger Growth – More jobs and stronger wage growth are expected.
- Guaranteeing the essentials – Investing in the essential services Australians rely on.
- Living within our means – Sticking to our plan to return the Budget to balance.
Budget 2018: Fact Sheets
We have included the most relevant fact sheets here for your convenience.
Please see the links below to access these Fact Sheets:
1: Lower, Simpler, Fairer taxes (Personal Income Tax Plan)
2: More Choices for a Longer Life Package overview
3: Preparing financially for a longer and more secure life
3.1: Pension Work Bonus
3.2: Superannuation Work Test exemption for retirees
3.3: Expansion of the Pension Loans Scheme
3.4: Retirement Income Framework
Note: Other Budget Fact Sheets are available. We have selected those above as most likely to have relevance.
Tax Relief Estimator:
Tax relief will encourage and reward working Australians and reduce cost pressures on households.
The plan has three parts.
- Tax relief for middle and low-income earners now.
- Protecting what Australians earn from the impact of bracket creep.
- Ensuring more Australians pay less tax by making personal taxes simpler. As a result of the plan around 94 percent of taxpayers are projected to face a marginal tax rate of 32.5 percent or less in 2024-25.
In-depth – Strategy and Outlook
Download the Federal Government 2018 Budget Strategy and Outlook papers from the links below:
Note: Other Budget Strategy and Outlook papers are available. We have selected those above as most likely to have relevance.
In-depth – Further Information