The release of the federal budget each year is always an exciting time, particularly in the realm of financial planning. The budget affects everything from taxes to superannuation, and knowing what changes it plans to enact can help Australians – and their financial advisers – create a viable strategy for the future.
Whether you’re about to retire or are still years away from it, here is what the budget means for you.
1. Pension reductions make saving more important
One of the more dramatic changes brought about by the budget is the decision to alter the asset test thresholds for the age pension. Previously, for couples, it was possible to own up to $1.15 million, coupled with your family home. But according to Minister for Social Services Scott Morrison, the planned reduction will take 91,000 Australians off the part pension, and another 235,000 will see their part pension lowered.
As Association of Superannuation Funds of Australia CEO Pauline Vamos pointed out, this means saving extra for super is even more important. Any Australians who were depending at least partly on the age pension to maintain their desired post-retirement living standard ought to be looking at alternative superannuation strategies.
2. More money in small business’ pockets
For some better news, anyone with a business in Proserpine, Bowen, Cannonvale and elsewhere in the Whitsunday Shire will end up keeping more of their hard-earned profits for themselves. Small businesses – meaning, those with a turnover of less than $2 million – will see their company tax fall by 1.5 per cent to a total of 28.5 per cent. According to Treasurer Joe Hockey, the businesses affected by this number 780,000.
More money in their pockets opens up a variety of options for business owners. They could invest it, put it back into their own companies or – combining it with the point above – even put it into their super for a more secure retirement.
3. Support for farmers
Having the right insurance in place to protect against a loss of income from disasters and unexpected events is critical for anyone. Nevertheless, it will be encouraging news that the government has decided to continue the Drought Concessional Loan Scheme to further assist farmers whose livelihoods are hurt by drought.
Not only that, but farmers everywhere will be able to benefit from new tax deductions. Fencing and water facilities can both be claimed against a farmer’s income as part of the 2015 budget, while the cost of fodder storage assets can be depreciated over the course of three years.
If you’re wondering how any other measure in the budget is going to affect you, it’s worth talking to a financial planner in the Whitsunday Shire. They can explain the facts in clear, simple terms.
