Budget 2019

The budget was released last week and I have been pondering and reading through it since its release together with Labour’s response. Here are my findings and thoughts.

Back in Black

The catch cry of this year’s budget is Back in Black. Not really a reference to the Hit song by AC/DC but more so in regards to the inference of Australia getting back into surplus where it should be after years of deficit.

So how does the government intend to do this?

Who is winning and who is losing out of this year’s budget?

Budget Highlights

Personal tax cuts – $19.5bn package of personal income tax cuts
Small business – Instant asset write-off increased to $30k and expanded to businesses under $50m
Infrastructure – $100bn in infrastructure projects across all States and Territories
Regulators – $1bn ATO task force funding targeting multi-nationals and high net worth individuals

Personal tax cuts

It appears that middle income earners and small businesses of Australia are the big winners of this years budget with Tax cuts. The tax cuts are quite healthy and are aimed at stimulating the economy.

Low and middle-income earners are promised a tax cut of $1,080. A dual-income household will save $2,160. About 4.5 million Australians will receive this tax cut

Small business

For the first time, medium-sized businesses with a turnover of up to $50 million will be able to instantly write off assets. The threshold for these assets has also been increased from $25,000 to $30,000. In order to create more jobs and up skill employees, businesses will also be given a $4,000 incentive to hire apprentices in industries with skills shortages like baking, bricklaying, carpentry and plumbing. Apprentices will also get $2,000 when they hit key milestones.

Regulators

The government is also allocating $1 billion to the ATO to tackle multinational companies and high net worth individuals who are currently avoiding tax.
The government will try and cut back on overpaying welfare by automating the system and data sharing between agencies. This will save about $2.1 billion with this money go in to help the budget get back to surplus
An additional $42m has been provided to the ATO to recover unpaid tax and superannuation liabilities focussed on larger businesses and high wealth individuals. The measure is expected to create a budget gain of $103.6m.

So how is the budget now going to get back to surplus??

The Liberals are predicting a $7.1bn budget surplus in 2019-20.
The Budget sets out:

• $11bn surplus in 2020-21
• $17.8bn in 2021-22
• $9.2bn in 2022-23 leading to the elimination of Government debt by 2029-30.

If the Liberals can come through with the good on this then there should be some good years ahead for Australians.