Federal Budget 2018: What Does It All Mean?

By Sarah Templeton & Andrew Hayes, Westlawn Wealth Adviser & Director Business Services
30 May 2018

Another year is passing us by ever so quickly and with that comes new seasons and… another Federal Budget. While there’s plenty of media coverage and advice out there breaking down what it all means for all people of all incomes and circumstances, the reality is complex to decipher. One of the many roles of our Wealth Advisers is to assist you in deciphering the Federal Budget, and understanding how it impacts on you personally. Here is what you need to know…

This year’s budget was certainly no overhaul, but has made the most of strong economic conditions. Tax cuts were the primary take home message for income earners and despite no immediate windfalls, a few extra dollars in your pocket never goes astray.

There have been some minor tweaks to superannuation such as the ability for young people to opt in to insurances within super, and a ban on exit fees. These measures are in keeping with a more broad, strong and welcome shift towards financial services businesses acting in the best interests of clients, something that we have long been passionate about at Westlawn.

A Westlawn professional can assist you to improve your financial position by helping you to navigate legislative change as well as changes in market conditions, helping you to champion your own unique and highly personal financial goals.

We’re very happy to share with you this excellent video from MLC, breaking down the tax cuts that will be phased in over seven years and affect different people at different times.

Federal Budget Personal Tax Cuts — In Brief:

First wave will kick in on July 1, 2018

  • For those earning between $48k-90k per annum: a new low-and-middle income tax offset of up to $535 a year will be passed on
  • For those earning below than $37k: a maximum rebate of $200 may be available
  • For those earning over $87,000: there will be an increase in the threshold at which the 37c tax bracket kicks in, saving $135 a year. Small but sweet.

Westlawn Tip: these cuts are not factored into your fortnightly salary — you’ll receive this rebate once you submit your tax return

Second wave will kick in on 1 July 2022

  • For those earning between $41k-90k: the $37,000 tax threshold at which the 37c tax bracket kicks in will increase to $41,000 and deliver savings of up to $540 a year
  • For those earning over $120k: $90,000 tax threshold will increase to $120,000 and deliver over $2000 tax cuts a year

Third wave will kick in on 1 July 2024

  • For everyone earning between $41 – $200k: the 37cent tax rate will be abolished altogether. Everyone earning above 41k will pay 32.5 cents in the dollar up to 200,000 per annum.

SOURCES:

MLC Federal Budget Analysis

To find out how we can help your business, contact us today.

Call us on 1300 WESTLAWN (1300 937 852).