2019/20 Federal Budget Report
A Budget for the political times tempered by the economic times, is the underlying theme for Budget 2019.
With Scott Morrison to call the election within a matter of days, Treasurer Josh Frydenberg had to pull a rabbit out of the hat last week and we’ll know by election day whether it’s a live one or not. The strategy was simple; reinforce the Government’s superior economic management with cash hand-outs, restoring the surplus and covering essential services all without having to increase taxes. Effectively the scene has been set for a tax stoush all the way through the election campaign.
So, what to make of the actual budget measures? From a financial services perspective, not a lot and after a year of Hayne royal commission there isn’t much the Government can announce that would shock us. In-fact the big story for us was more about ‘what was not included’. No mention of unfunded Age Pension liabilities (a very real and global problem over the next 20 to 30 years) or the impact of baby boomers retiring. A phenomenon that the Budget Office itself proclaims will see revenue fall by around $20 billion and spending increase by $16 billion to 2031.
But let’s face it, no real surprise there – “No pain, no gain” budgets (Joe Hockey, Budget 2014) don’t have a great track record when it comes to winning over the public or winning elections.
The majority of you will have read the facts and figures and by now will have an understanding of the proposed measures. Normally our summary would not be a simple reiteration of these facts, however this year (from a financial planning perspective) there is so little that the normal ambiguities are distinctly missing. None-the-less we seek to report on all the relevant measures with clarity and where appropriate have included a FinSec comment.
We trust that you enjoy the read and we look forward to speaking with you individually about how this budget may impact your personal circumstances.