2019/20 Federal Budget Overview
Bob Locke, founder of Practical Systems Super, examines the 2019 Federal Budget.
Over my 35 years of working as an accountant and taxation expert, I have watched the increasing complexity in the administration and compliance of SMSFs in the face of ever-changing government regulation.
On the back of an improved fiscal position, the budget was clearly designed for an election year with no surprises or “hits” and where most people will benefit from tax cuts.
The slated tax reductions will increase consumer disposable income. In the context of the current lower than average consumer confidence, you could expect some of this to be saved (rather then spent) and some of these savings could flow into superannuation.
It’s good to see that the budget position is finally heading back into surplus but paying down the existing debt is going to require a sustained discipline on the part of current and future governments.
The 2019/20 Budget and superannuation
There were very few measures in this year’s budget relation to superannuation.
I think this is a good thing and very wise given the massive changes made over the last few years (i.e. changes to contribution caps, introduction of the Transfer Balance Cap and Totals Super Balance cap, etc.).
Any changes to superannuation arrangements tend to impact negatively on general confidence in superannuation – negative changes especially, but also positive changes can influence the general perception that “governments are always changing the rules and I can never be sure how my superannuation savings will be affected in the future”.
In my experience, younger people in particular are often skeptical about making additional contributions to super as constant changes undermine their confidence in a system where the government is supposed to be supporting and encouraging provision for their retirement.
To find out more about how the budget will impact on your SMSF call the office on 1800 951 855.