The 2015 Federal Budget - Tame and Fair

13/05/2015
Provided by Mercer.

It's been referred to as the "Give-it-a-go" budget aimed at stimulating the workforce and creating more jobs through incentives and small businesses.

Treasurer Joe Hockey promised a tame affair for his second budget and he delivered.

Mr. Hockey kept his government's promise not to introduce "adverse changes" to superannuation but he did tinker with age pension eligibility rules, while scrapping last year's doomed proposal to restrict pension increases to the CPI.

Pension changes

From January 2017 it will be easier for people with fewer assets to get the Age Pension. About 50,000 retirees on the part-pension will qualify for the full pension and about 170,000 low-to-middle income pensioners will be better off.

But the asset rich will find it harder to qualify or receive a reduced payment. About 91,000 current part-pensioners will get no pension at all and a further 235,000 will have their part pension reduced.

The health sector

The budget had little to offer the health sector, providing ongoing funding for some previously announced initiatives such as the Medical Research Future Fund but not much else.

A boost for childcare

A $3.5 billion childcare package - one of the few major reforms to come out of Tuesday's budget – is tied to unpopular family welfare measures announced in 2014 and still stalled in a hostile Senate.

But Mr. Hockey declared Australia "open for business". Well, small business anyway.

Small Businesses

The government is clearly looking to small businesses and start-ups to generate jobs and increase workplace participation; small businesses with annual turnover of less than $2m were the big winners last night with reduced tax rates for companies and a 5% discount on tax for sole traders.

Very few measures announced on Tuesday 12 May will take immediate effect and many will require legislation, particularly the big-ticket items such as proposed changes to pension eligibility.

Is now the time to act?

So if you are affected by last night's budget proposals - for good or for ill - you have time to act and adjust your plans to soften the blow of adverse changes and ensure you take full advantage of changes that fall in your favour.

 

This information has been prepared by Mercer Outsourcing (Australia) Pty Ltd (MOAPL) ABN 83 068 908 912, Australian Financial Services Licence #411980. Any advice contained in this document is of a general nature only, and does not take into account the personal needs and circumstances of any particular individual. Prior to acting on any information contained in this document, you need to take into account your own financial circumstances, consider the Product Disclosure Statement for any product you are considering, and seek professional advice from a licensed, or appropriately authorised, financial adviser if you are unsure of what action to take. "MERCER" is a registered trademark of Mercer (Australia) Pty Ltd ABN 32 005 315 917. Copyright 2015 Mercer LLC. All rights reserved.
 

SA Metropolitan Fire Service Superannuation Pty Ltd ACN 068 821 750 as Trustee for the SA Metropolitan Fire Service Superannuation Scheme ABN 99 439 309 855.

This website is provided by Mercer Outsourcing (Australia) Pty Ltd (MOAPL) ABN 83 068 908 912, Australian Financial Services Licence #411980. The Trustee pays a fee for the provision of this service, however this fee is not conditional on you using this service or acting on the information or advice provided through this service.