Federal Election 2019: Which party will leave you financially better off?

The election is just over a week away so under which political party will you be left financially better off?

Voters’ hip pockets will be hit harder if they vote Labor and less if they vote for the Coalition, experts say.

Under a Labor government voters will pay more tax and less if they vote for the Morrison Government on May 18.

Australians who have built up their wealth will be the hardest hit this federal election, by being stripped of franking credit cash refunds, the dumping of negative gearing and halving to the capital gains tax discount.

AMP Capital chief economist Dr Shane Oliver put it simply; “under Liberals you’ll be paying less tax and you’ll end up with lower government spending”.

“Under Labor you’ll be paying more tax and the offset will be there will be more government spending.”

A tax cut will be delivered by the Coalition from July 1 to more than 10 million workers including about 4.5 million people will receive the full $1080 for 2018-19 — a move which Labor matched.

You will pay less tax if Scott Morrison’s party is returned to government. Picture: Alex Coppel.

Labor is set to deliver its budget costing tomorrow but has already promised $1000 of free dental care for pensioners every two years.

They have also offered cheaper child care for working parents earning up to $174,000 a year.

“Lower and middle income earners will receive tax cuts once they fill in their tax returns for this financial year, and the Liberal policy is for tax cuts over the next decade,” Dr Oliver said.

“Under Labor they’re not offering tax cuts beyond those in the short term.”

The pain on the hip pocket remains at the forefront of this election campaign.

If Opposition Leader Bill Shorten has his way, he’s made it abundantly clear to voters that

Australians eyeing off investing in property and shares will have generous tax breaks dumped.

As for the wealthier and those who are self-funded retirees, relying on dividend imputation credits, cash refunds for unused franking credits will be stripped away from them.

Prime Minister Scott Morrison has followed the Coalition’s long-running conservative approach to managing money and has boasted about Liberal’s ability to pull the nation out of deficit and back into black for the time in 2019 in 12 years.

Labor is set to deliver its budget costing. Picture: ABC

The surplus will be delivered in the 2019/20 financial year.

But non-existent wage growth, zero inflation and the soaring cost of living cannot be shied away this election time.

However experts say Labor’s cutting of major tax incentives including negative gearing, capital gains tax discounts and dividend imputation credits will impact how voters fill out their ballot papers.

Metropole Property Strategists chief executive officer, Michael Yardney, said this election was “more polarised” relating to tax and property.

“If the Coalition gets re-elected it is probably going to be business as usual and the property market will pick up in the second half of the year,” he said.

“We are at the slump stage of the property cycle and it is likely property prices are still going to drop a little more, but green shoots are appearing.”

Metropole Property Strategists CEO Michael Yardney says if the Coalition is re-elected it will be business as usual.

But Mr Yardney said if Labor gets in tenants should expect to see their rental costs climb on the back of negative gearing and capital gain tax discounts changing under Labor from January 1, 2020.

Deakin University’s tax expert associate professor, Adrian Raftery, said the attractiveness of investing in property and negatively gearing will significantly drop off.

“Investing in property definitely won’t have as big as appeal as it would have because many people were sold on the negative gearing deal,” he said.

“They went to property spruiker seminars and learnt that you could use tax to pay for the property and less and less will be doing this.”

Labor has also proposed an ambitious electric vehicle policy that sets out to have 50 per cent of all new cars sold in Australia to be electric by 2030.

Mr Morrison attacked the policy and said it was unrealistic, expensive and out of touch.
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Originally published as Federal Election 2019: Which party will leave you financially better off?