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Welcome to the 2012 Federal Budget edition of E-Link. There were warnings in the lead up to Tuesday night’s budget release that the federal government would take a tough stance as it sought to achieve a surplus this year. The federal government has certainly delivered on at least one of its promises: planning Labor’s first budget surplus in 25 years of $1.5 billion in 2012–13. The federal government intends to increase the surplus to $7.5 billion in 2015–16. It’s quite a turnaround from the $44 billion deficit returned in 2011–12. But creating a budget deficit has come at a cost, especially to high income earners and corporate Australia. The government failed to deliver on key commitments, such as the 1% tax cut for companies. In addition, superannuation has been targeted in the drive to create savings. So what does this budget mean for you? We’ve identified some of the most pertinent changes for our clients, and summarised the details in each of the sections below. Arguably the most important aspect is the need to review your financial plan. The proposed measures will influence the effectiveness of some strategies, so some tweaking may be needed to prepare for 2012–13. And it’s now even more critical to take a long-term perspective, especially with the changes to superannuation. If you would like further information, or would like to discuss your personal circumstances, please contact us. Regards The Bongiorno Team |
Changes to personal tax ratesChanges to the tax-free threshold and tax rates will apply from 1 July 2012. But there will be little benefit to anyone earning over $80,000. Read More » Superannuation in the spotlightA lower concessional contributions cap for those aged 50 and over, and the introduction of a new surcharge on contributions by higher income earners, threatens to reduce the effectiveness of superannuation. Read More » Living away from home allowanceHaving adopted the view that it was mainly senior executives who benefited from this allowance, the government has acted to restrict its availability Read More » Replacing a refund with a bonusIn a move that will eliminate the need to save receipts, the government has announced plans to replace the education tax refund with a bonus. But the eligibility criteria will limit the number of families who benefit from the payment. Read More » Changes in health spendingHealth spending is always an area that attracts attention on budget night. And what this budget gives with one hand, it seems to take with another. Read More » What’s the economic outlook?With the delivery of a budget surplus, the Reserve Bank of Australia is likely to play a greater role in influencing the economy through monetary policy. Read More ». |