There has been so much commentary about COVID-19 and the impact to the economy, we know that the general consensus to defer the budget was necessary in the context of a dramatic first half of the 2020 Calendar year.
Tuesday’s budget night had some key takeaways for individuals. For a more detailed information update, you can read more about it here from Grahame Evans, Easton Wealth.
With all this information and talk about the budget in the media, Tabitha believes ‘the sentiment of the budget is to return more spending money into the hands of the population with a goal to generate more spending and help the economy to rebuild and grow. Think of a time in the past that a similar strategy was undertaken, GFC, 2008-2009, with government bonus payments to tax payers, and tax cuts. Tax breaks like this become a longer-term strategy to increase spending in place of a once-off bonus.’
Tax Payers – Typically Our Working Clients
From our perspective, for our tax-paying individual clients, we predict reduced income tax measures to benefit most clients who are working.
If you are one of the 2.4 million Australians who earn up to $37,000 pa, you’ll receive a one-off tax relief of up to $510.
If you earn between $37,001 and $48,000, as 1.8 million individuals do, you will receive a one-off tax relief of between $510 and $2160.
The most popular tax bracket which includes 4.6 million Australians, being the income of $48,001 to $90,000 – you’ll receive tax relief of between $2160 and $2295.
Finally, if you earn between $90,001 up to $126,000, you’ll receive tax relief of between $2295 and $2745. Finally, an annual income of $126,000+, you will not receive a once-off tax relief.
Alex Jenkins questions, ‘Will individuals and families save this money, reduce debt with the additional money, or spend it as is the intention?’
Pension clients who benefit from a Government pension or are eligible for the CSHCC, can expect further payments from the Government. Specifically, two supplement instalments of $250 to be paid directly to you with the first made in December, and the second made in March 2021.
Those receiving the age pension, as well as disability carers, are eligible for the payments, and they work similarly to the $750 payments seen earlier this year.
Keep an eye out for the payments, but note they may not appear in bank accounts for a few weeks – pensioners can check MyGov to make sure their details are correct.
‘Is this a short term way to pay a bonus and to hold off on long term increases to pensions such as the typical March and September pension increases?’ is a question that Simon Tworek poses in response to these supplements.
There was no mention of JobSeeker in the Budget, however, Treasurer Josh Frydenberg did say it would be under review at the end of the year.
First Home Buyers – Increased Support
Government assistance for first-home buyers and loans to build affordable housing are at the centre of federal Budget efforts to support the construction and housing sectors.
The extension of the First Home Loan Deposit scheme was one of the few housing-related measures in this year’s federal Budget, handed down by Treasurer Josh Frydenberg on Tuesday night.
The scheme enables first-home buyers to get into the market with a deposit as low as 5 per cent while avoiding lenders’ mortgage insurance, with the federal government acting as guarantor on the loans. The extension of the scheme will open up an additional 10,000 opportunities this financial year for first home buyers to participate.
Tegan Del Moro predicts that ‘employment conditions may continue to be an ongoing challenge for First home buyers especially for those that have been supported by JobKeeper or JobSeeker. They will still need to focus on their own savings capacity, and spending behaviours to manage their home loan.’