Budget 2019 – What it means for you

With the backdrop of a Federal election looming, Treasurer, Josh Frydenberg MP handed down his 1st Budget on the 2nd April 2019. The Government framed this budget around building a stronger economy and securing a better future for all Australians with five core pillars:

  • Returning the budget to surplus – next financial year
  • Providing lower taxes
  • Backing small business and delivering more jobs
  • Guaranteeing essential services like Medicare, schools, hospitals and roads
  • Investing in the community

The 2019 Federal Budget was very much a predictable pre-election budget, with a range of tax cuts for both individuals and businesses, a myriad of spending measures, the Treasurer aiming to steady the boat for the population and delivering promised investments in transport and infrastructure, as well as spending in education, healthcare, and support for other parts of the community. The Treasurer also announced increased funding for the regulators to encourage tax and superannuation compliance and a number of positive changes to superannuation, and an affirmation of previously announced aged care measures, and an energy assisstance payment as part of his social security measures.

The personal income tax cuts will be welcome for individuals, and while the low and middle income tax offset will be available for the current year, the most significant of the cuts are a long way off and only coming into full effect after five years.

The numbers that matter

  • Budget surplus of 7.1 billion – next financial year. The first budget surplus forecast in 12 years – this is an improvement of 4.1 billion on previous forecasts.
  • Economic growth (GDP) of 2.75 per cent.
  • Inflation of 2.25 per cent as per CPI.
  • Unemployment rate of 5.00 per cent.
  • Net debt forecast at 361 billion in 2019/20 – goal to eliminate by 2030 or sooner.

We provide an overview of the broader budget impacts and measures below noting that before any announcements can be implemented, they require passage of legislation and may be subject to change.


Future generations – The budget forecasts a return to surplus of $7.1 billion by 2019-20, after more than a decade of deficits since the global financal crisis.

Individual taxpayers – The budget promises a $302 billion package of personal tax cuts to be rolled out over the next decade, including increasing the top threshold of the 19% personal income tax bracket from $41,000, as legislated under the plan, to $45,000 as well as lowering the 32.5 per cent rate to 30 per cent from 1 July 2024, and in 2024/25 removing the 37% tax bracket as legislated, increasing the reward for effort by ensuring a projected 94 per cent of taxpayers will face a marginal tax rate of no more than 30 per cent.

Middle and low-income earners – Middle and low-income tax earners will get a tax offset of up to $1080 for single earners or up to $2160 for dual income families.

Small business owners – The small business instant asset write-off threshold will be lifted to $30 000 and expanded to include businesses with a $50 million turn over. This change applies from 7:30 AEDT on 2nd April 2019 to June 30, 2020.

Small business tax cut – For businesses with a turnover of less than $50 million a year their tax rate will be lowered to 25 per cent by 2021-22.

Older Australians – $282 million for 10,000 home care packages to help older people who want to stay in their homes.

Infrastructure – The budget includes a record $100 billion in funding for road and rail projects around the country over the next decade.

Superannuation – Proposals include work test changes, spousal contributions, a bring-forward of teh NCC Cap, tax relief for merging superannuation funds and a simplification of administration.

Patients – Extra $7.7 billion over three years to 2022-23 for better access to MRI scans for patients with breast cancer, and $1.4 billion over five years from 2017-18 for new Pharmaceutical Benefits Scheme listings, including medicines to treat spinal muscular atrophy, breast cancer, refractory multiple myeloma, relapsing-remitting multiple sclerosis and a new medicine to prevent HIV.

Medical research future fund – $ 5 billion will be granted to the fund, including $614 million for rare cancers and diseases, $220 million for cardivascular health, $605 million for clinical infrastructure and $150 million for stem cell research.

Mental health – $737 million will granted over seven years, including $461 million for helping young people by reducing waitlists and addressing youth suicide.

Drug addicts and their families – Through it $337 million drug strategy, the Government is hoping to target the harmful effects of ice, alcohol, tobacco and opioids by increasing access to services outside metropolitan areas, funding local family drug support services and include measures to target opioid use.

Vocational education – The sector will receive an extra $525 million.

Parents/children – Preschool education will get a $453 million boost for the 2020 school year.

Regional students – $93.7 million will be granted over four years for scholarships to attend regional universities or vocational education.

Regulators – Gain $600 million in funding for the banking royal commission fallout.

Multinationals – An extra $1 billion will be granted to the ATO to hunt down multinationals not paying their tax. The government predicts this measure will raise $4.6 billion.

Accountants, consultants – The tax crackdown will focus on intermediaries such as tax advisers and agents.

State governments – Are forecast to be the “hidden losers” from a $10 billion downturn in GST revenue triggered by the property downturn. GST receipts are tipped to be $10.3 billion lower over the four years to fiscal 2023.

Start ups – The research and development tax incentive will be cut by a further $1.35 billion over the budget forward estimates in a blow to start ups.

Welfare rorters – The income of those who receive Centrelink benefits and work part time will be scrutinised by the ATO and the Department of Human Services. The government says this will save the commonwealth $2.1 billion over five years.

Source: Commonwealth of Australia Budget papers 2019
Anthony Landahl | Equilibria Finance

This is for general information purposes only and does not constitute advice. With all of these options there are a number of considerations outside the scope of what is covered in this article that you need to understand to ensure your personal circumstances are taken into consideration.

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