What's in store - Pain or Profit? - Tina Zawila
We held our Pain or Profit Seminar last Tuesday night. It was the first time we have held a seminar based solely on the topic of the Federal Budget, the Australian economy and party policies – sounds riveting right?
Steve and I wanted to help our clients and community understand the various announcements being made by both sides of politics as we head into a Federal Election. Add to this the recent Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Sector, and the state of both our local, the Australian and the global economy, there was a lot to talk about.
While I cannot cover all of the topics in this short article, I would like to provide you with a few key points and topics that we discussed at the seminar:
1. The Australian Economy – compared to the rest of the developed world we have strong growth, but it is lower than it used to be. The good news is we have had 28 consecutive years of economic growth, low unemployment (sub 5%) and strengths in our export market. However, on the flip side we have experienced slow wage growth, falling house prices and a squeeze on household incomes. We also face long-term challenges regarding low productivity growth and shifting demographic trends (an aging population).
2. The Federal Budget – this was very much a pre-election budget with lots of talk about “giving back to Australians” via an increased low to middle income tax offset and personal tax cuts in the coming years via movements in thresholds and rates. Superannuation was largely untouched, and small and medium businesses were offered an extension and increase in the Instant Asset Write Off.
3. The Opposition – the announcements made by the ALP suggest changes to negative gearing and capital gains tax effective from 1 January 2020, reductions in the limits on non-concessional contributions to superannuation and other changes to concessional (deductible) contributions, and changes to the imputation system regarding franking credit refunds. Changes to the way discretionary trusts are taxed and limits on the tax deduction you can claim for your tax advisor were also announced.
As you can see by this brief summary alone, there’s a lot to understand and consider, and I appreciate this isn’t everyone’s cup of tea. However, in a few short weeks we will all be asked to cast our vote at the Federal election on 18th May and ideally you should be able to make an informed decision.
If you need any further advice, explanation or interpretation of any of the announcements, please do not hesitate to contact our professional team of advisors at UHY Haines Norton Gladstone on 4972 1300.