With the opposition ALP having already been quite forthcoming with announcing their proposed policies should they win the election, including most notably reforms to negative gearing, taxation of trusts and the dividend imputation system, it was always going to be interesting to see how the incumbent government responded – and what was delivered was arguably a classic ‘pre-election’ budget.
The headline was of course that the treasurer, Josh Frydenberg, announced an expected budget surplus of $7.1 billion with more to come over the forecast period.
On the back of the projected surplus, the government have announced a plethora of spending measures, including:
- Infrastructure investment - including circa $15b in major road and rail projects such as the M1 Pacific Motorway extension and other significant works. The government set aside $3b for the ‘Urban Congestion Fund’ and have also promised money for investigating regional fast rail links, including the oft-discussed Sydney-Wollongong fast train.
- Increased spending on health, including new and amended listings of medicines on the PBS to the tune of $331m.
- Funds for natural disaster relief including North QLD floods.
- ‘City and Regional Deals’ providing funding to allow “urban and regional communities to reach their full potential”.
- Drought relief measures including increased access to Farm Household Allowance for primary producers.
- Funding for the government’s response to Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry including the establishment of a new oversight body for APRA / ASIC.
- Measures on the revenue / taxation side of the budget. Kirstie Smith covers this comprehensively in her breakdown of proposed superannuation and taxation changes here.
Some will argue that the forecast surplus is just that, a forecast, and that with the global outlook a little uncertain we should as a nation focus more on saving. On the other hand, perhaps some spending and tax cuts from the government are required in the context of a stagnating economy and slow wage growth. What do you think?
Regardless of who wins the upcoming Federal Election and dictates the 2019 Budget it is crucial to ensure your business is prepared for when changes are implemented. Our advisers are here to help, get in touch with our team at BLG Business Advisers online or by calling (02) 4229 2211.