Stimulus, recovery – Federal Budget keys

AWimmera financial advisor has listed greater superannuation flexibility for elderly Australians, continued support for small business and more help for home-buyers as key outcomes of the 2021 Federal Budget.

Consortium Private Wealth director and The Weekly Advertiser finance columnist Robert Goudie said the budget’s primary design was to steer Australia away from a pandemic recession.

“It represents an economic boost to Australia’s recovery through specific targeted measures, and this of course includes the Wimmera,” he said.

“For example, when it comes to retirement-savings proposals, Australians aged 67 to 74 will no longer need to satisfy the ‘work test’ requirements in order to make super contributions.

“This happens while the age requirement on ‘downsizer’ contributions, which allows top-ups of up to $300,000 per person, will drop from 65 to 60.

“While these changes will not come into effect until July 1, 2022, they will allow many older Australians to make significant super contributions and effectively restructure their financial affairs, even after they have retired and left the workforce.”

Mr Goudie said another key announcement was that about 300,000 working Australians, mostly women and earning $450 or less a month from a single employer, would now receive full super-guarantee-contribution entitlements.

“This provides a significant boost to their retirement savings,” he said.

Mr Goudie said the budget also outlined how it planned to accelerate growth by extending three of its most successful business-support programs.

“Temporary full expensing will continue until June 30, 2023. Small-business owners can claim the full cost of buying a car or piece of equipment as an immediate tax deduction,” he said.

“Temporary-loss carry-back provisions will now include the 2023 financial year. Businesses can claim a tax refund with ‘carry-back’ losses from one trading period used to offset a profit from a previous trading period.

“The Job Trainer program will also continue, with the government providing a 50 percent wage subsidiary for another 270,000 new apprentices and trainees hired by Australian businesses – as well as a raft of other employment boosting initiatives.”

Mr Goudie said budget details were also designed to continue to help potential home-owners.

“Those struggling to take their first step on the property ladder will benefit from the Federal Government’s decision to allow first-home buyers to access $50,000, up from $30,000, from their superannuation savings to contribute to their deposit,” he said.

“Some 10,000 Australians will also be able to buy a new home with just a five percent deposit under the New Home Guarantee, while a further 10,000 single-parent families will be able to buy a home with just a two percent deposit under the Family Home Guarantee.”

Social initiatives

Mr Goudie said other announcements included: • $353.9-million for a range of initiatives supporting women’s health. • An extra $80,000 in-home agedcare packages during the next two years. • $7.8-billion to aged-care providers during the next five years. • $1.7-billion for childcare effective from July 1, 2022. This will include the removal of the subsidy cap for high-income earners and increased subsidies for families with two or more children under five. • The extension of the temporary low-income and middle-income earners’ tax offset, where those earning less than $126,000 will receive a $1080 tax offset until 2022.

Mr Goudie said many announcements would take time to come into effect.

“People keen to find out how and when they might benefit from these developments should seek advice from an accountant or financial advisor,” he said.

Mr Goudie stressed his assessment was general in nature did not constitute personal finance advice.