In depth analysis of Federal Budget 2022: Money Cafe podcast with James Kirby

With extra time to pour through Budget papers, Ticky Fullerton and Ross Greenwood join James Kirby to unearth hidden information to help investors.

Money Cafe looks at whether the Budget’s new parental leave package is actually better for women’s career prospects.

One of the biggest problems in analysing the federal budget this year - or any year- is the extremely short time analysts get to actually digest an enormous amount of information: In our special subscriber-only edition of Money Cafe we had a full 24 hours to pour through the papers and we discovered heaps of new information that will help investors.

You can see the special episode of the podcast here.

In this special episode I’m joined by Ticky Fullerton, editor at large of The Australian Business Review and Ross Greenwood, Sky News business editor.

We discovered a pro-business Budget with optimistic forecasts for the years ahead and an inflation assumption that was perhaps too optimistic altogether.

Of course there was the big spending on defence and infrastructure, the low income cash splash but did you know small business picked up a very useful new tax benefit when there is fresh investment in cyber security?

Similarly, though we knew that first home buyers and retirees picked up some useful extras - an expanded First Home Guarantee Scheme and an extension of the reduced super drawdown scheme - the $314m package to boost parental leave conditions was something very few investors expected.

Of course it’s hard to please everyone and the panel is certainly split on whether the new package - which creates a pretty generous household income threshold of $350,000 - is actually better for women’s career prospects.

Another surprise was the regional infrastructure package which, as Ross Greenwood points out, could be another boost for the awakening economy of regional Australia which is currently enjoying an exceptional uplift in property prices often outpacing the major cities.

Separately, our regular audio-only Money Cafe podcast deals with the Budget for investors and takes a range of reader questions.

Money Cafe Q&A
This week’s guest is financial adviser, James Gerrard of www.financialadvsor.com.au and our question of the week comes from Philip.

Question: In super what is the relationship between the maximum yearly super contribution of $27,500 and the maximum employer contribution of $23,568 (ie 58920 pq = 235,680 yearly at 10%)? Why is there a gap?

Answer: The answer relates to the gap between the most you can put into super on a pre-tax (concessional basis) which is $27,500 and the current legislation which says that an employer when paying the mandatory Superannuation Guarantee Charge (currently 10 per cent and rising to 10.5 per cent on July 1) cannot pay more than $23,568 even if the 10 per cent worked at more than the figure.

For example, someone on $300,000 is technically due an SGC of $30,000 but the maximum the employer can pay is $23,568. It turns out the gap is coincidental and largely due to the shrinking of the pre-tax contribution cap in recent years.

If you have a question for the Money Cafe let us know [e-mail]