It is very important for investors and people planning for their retirement to keep up with what is happening in the economic environment as changes can have consequences. Recently the Government struck a deal with the Palmer United Party to deliver on its election promise to axe the mining tax.
The Mining Resource Rent Tax (MRRT) also known as the mining tax was a 30% resource tax applying to the taxable profit of mined iron ore and coal.
The decision to repeal this tax will come at a cost of $6.5 billion over the next four years. The reduction in budget savings will be recovered by pausing the Superannuation Guarantee (SG) rate for another 2 years at 9.5 per cent. This will see the SG rate at stay at 9.5% until July 1, 2021.
After this, the superannuation guarantee rate will increase 0.5 per cent each year until it reaches 12 per cent from July 1, 2025.
This pausing of the Superannuation Guarantee will be of concern to our ageing population who will now need to adjust their financial planning to incorporate the reduction in forecast super contributions. It is important for people who have Superannuation figuring prominently in their retirement planning to seek professional advice from credible Financial Planners to make adjustments to their investment and financial planning strategies. Insight Wealth & Accounting Advice is particularly focussed on ensuring our clients are protected by the changing economic conditions. Give us a call and make an appointment to see how we can help.