On Tuesday 8 May 2018, the Australian Government handed down its Federal Budget.

We at Advantage One have analysed a lot of information and articles regarding the content and acknowledge a number of factors that clearly indicate it is a ‘political budget’, designed to provide a ‘bit here and a bit there’, so that everyone in the community gets a slice of the action. One media commentator provided a headline called ‘The Never Never Budget”, as it provided minimal immediate relief, but over some 7 years we would all benefit provided this Government was returned to power at least twice.

There are also some dubious or bold assumptions relating to China growth and commodity prices. One hiccup and the surplus literally goes up in smoke!

‘Smoke and mirrors’ are also a common budget analysis comment. This one is exactly that, as legitimate smokers are hard hit, as well as the tax on the illicit tobacco industry which has been allocated $3.6 billion over 4 years.

Missed Opportunities – yes indeed; no real structural tax reform.

Cutting personal taxes and reducing company taxes over 7-10 years is NOT tax reform. They are piecemeal. We would like to see a broad-based suite of reforms that will increase productivity growth and reduce the impact of damaging taxes. For example, in addition to the latest government budget announcements, the rate of GST will be increased to 15% and the tax base broadened; there’ll be a reduction or elimination of stamp duties and other State-based taxes; and the nexus between negative gearing and the CGT discount will be addressed, in regard to its impact on housing affordability.

This window of opportunity, pre-election is still there but is rapidly vanishing. Hopefully it will not be lost!

Supporting you through the changes

It’s important that you take the time to understand what the Budget proposals mean – and how they might affect you personally.

To help break down the key proposals we’ve included a Federal Budget overview that explains some of the key outcomes and what they mean to you.

Depending on your circumstances, the Budget proposals could have an impact on your financial situation and your financial plans for the future. If you have any concerns, or would like to discuss your financial/business strategy, please don’t hesitate to call 08 8203 4800 or contact us to arrange an appointment.

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