Here’s what the Federal Budget means for you
WORK out exactly what the Federal Budget means for you and your family with our exclusive online calculator — and see what, if any, cash you’ll get back.
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WORKING parents on middle incomes who have young kids are the biggest winners in this Budget.
These households are set to receive tax cuts of $1000 a year on top of even larger amounts of recently legislated childcare fee help.
Most of the tax relief in this Budget is paid as a lump sum — like the bonus your boss might have given you in the good old days.
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Delivering the cuts in this way should encourage them to be spent, which is what the Government wants in order to help boost economic growth.
There are hardly any losers from the key measures in this pre-election Budget, which hands back billions of dollars of tax revenue that until recently Scott Morrison didn’t expect to have.
“ScoMo” is enjoying a J-Lo moment. As Jennifer Lopez sings in her hit Jenny from the Block, he used to have little (extra tax revenue) now he’s got a lot — over four years it’s about $35 billion more than Treasury anticipated in December’s mid-year economic update. Most of that is windfall tax revenue.
PwC economist Jeremy Thorpe said: “It’s as if the Treasurer has found $35 billion down the back of the sofa and decided to spend $15 billion of it on tax cuts and save $20 billion for budget repair.”
Or as the Treasurer put it last night in his Budget speech: “The plan is affordable and funded.
“Our tax cuts are … not being achieved by increasing taxes elsewhere,” Mr Morrison said
It is merely “enabling Australian to keep more of what they have earned”.
The revenue windfall is manna from heaven for the Government desperate to find a way to win back voters from Labor before the election either later this year or next.
Exclusive analysis by PwC’s Mr Thorpe, a former Treasury boffin, can be used to work out how the Budget affects you. First, find the household type closest to yours then pick the nearest total income level.
The figures are annual comparisons between a no-change scenario and the net impact of the main hip-pocket measures. They show how each type of household is affected next financial year and the year after.
The results cover new proposals including the expansion of the low-income tax offset to middle income earners, raising the 32.5 per cent tax threshold from $87,000 to $90,000 and continuing the freeze on family tax benefits.
Also in the figures are earlier decisions yet to kick in, such as the big childcare rebate increases which start in July.
The numbers do not include abandoning the Medicare levy hike — because it never went up in the first place — or the plans for further tax cuts starting in 2022.
In some cases the dot points explain moves that couldn’t be modelled, especially for singles and retirees.
Don’t forget: the Turnbull Government doesn’t have the numbers in the Senate to automatically get its plans into law, plus there’s an election looming, so some of these things may never happen. That’s been the case with many recent Budget proposals.