This year’s budget was definitely aimed at business rather than individuals, and it needed to be. The main goal of the federal budget is to create jobs to repair the damage that Covid has done to the economy and Australian community.
Therefore, if you already have a job, there’s not much good news for you in the budget. However, there is plenty of good news for the Australian economy which will probably enhance the share market and property investment returns.
What’s in it for individuals?
The major benefit contained in the budget for individuals was income tax cuts. These tax cuts are backdated to begin on 1 July 2020. The table below sets out the tax savings (second column from the right) that you may enjoy.
The budget also included some other miscellaneous benefits, which are listed below.
Improving the super industry and performance
The government will direct employers to pay super into existing accounts (as advised by the ATO) to avoid opening a new account with a new super fund when you start a new job. This will avoid workers unknowingly accumulating multiple super accounts.
The government will also take measures to improve the accountability and transparency of super funds, which is a problem I have
written about previously. This includes building a MySuper website which will allow people to rank investment returns and fees. Any improvements in this space are long overdue.
Interestingly, the government did not announce that it would postpone the increase to the compulsory super contribution rate from 9.5% to 10% p.a. At this stage, this is still set to begin on 1 July 2021.
Granny flat arrangements
Granny flats will now be exempt from CGT where a formal written agreement is in place.
Relaxing the paid parental leave qualification criteria
Parents will qualify for parental leave payments if they have worked in 10 of the last 20 months, instead of 10 of the last 13 months, preceding the birth or adoption of a child. This is to accommodate the impact of Covid.
Additional government grantees for first home buyers
The government will make available an additional 10,000
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