Budget 2015 | What it means for you

Overnight, the Federal Government handed down its annual budget.

In describing his second Federal Budget the Federal Treasurer, Joe Hockey said ‘This Budget is measured, fair and responsible’ and is designed to promote ‘jobs, growth and opportunity’.

The Federal Budget speech delivered an upbeat outlook for Australia’s economic future and confirmed a number of measures that had been announced pre-Budget.

For the second year running no new taxes on superannuation were introduced, however some changes have been made to the Age Pension. These measures will increase the number of people eligible for a full Age Pension but reduce the level of assets at which a part Age Pension is received.

A number of measures were introduced to encourage growth in small business, including a reduction in the company tax rate to 28.5%, and an immediate tax deduction for items valued less than $20,000.

Social security measures primarily deliver a range of changes for families including the introduction of a single child care subsidy which is means tested. This long-awaited child care reform will simplify access to child care with a focus on lower and middle income families, as well as families with disadvantaged children.

In addition to these changes, the Government abandoned the changes to the indexing of the Age Pension and the resetting of the deeming thresholds. A number of personal income tax measures aim to modernise taxation methods including changes to the tax deduction of car expenses, caps on fringe benefits and subjecting GST to offshore digital services, like Netflix, provided to Australian consumers. However, big ticket tax reform measures remain for consideration in the Tax Reform White Paper and pre-Budget speculation that a new 0.05% tax would apply to bank deposits of up to $250,000 was not included in the Budget measures.

Before any of these announcements can be implemented, they will require passage of legislation, which will remain challenging.

4 minute Webcast:

To help address the issues raised in the budget, a webcast has been recorded by Sean Howard, Technical Services Manager, Challenger. The webcast highlights the main points and analyses the potential implications.

View the webcast

Key changes in detail: