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It’ll be alright on Budget night Posted on October 9, 2018
When the Federal Budget is handed down some of the most important indicators of the next 12 months of market movements, investment performance, financial support systems and the impact of social changes are also revealed. After all, it’s the money that our Federal Government spends that creates the society we live in – including health, education, business, social and other vital aspects.
But the numbers outlined in the Budget can seem so all-encompassing and broad ranging that is can be difficult to identify the ones that mean anything. Those numbers though, control so much of what goes on in Australian society that they each have trickle-down effects. Every individual should read these figures in light of their own situation.
For young couples, for instance, such matters as the Baby Bonus (removed on March 1 this year) and changes to Family Tax Benefits can have real and identifiable financial implications in the future as children begin to come into the picture and related costs start to add up.
Families that already have children are then affected broadly by any decisions made around education and child care funding. It’s not just about how much or how little will go into improving and supporting our education system and whether specific types of schools will receive the funding they want or need, but also whether any financial support will go to those sending their children to day care, whether financial support policies will involve means testing, how fees at private schools may change as a result of funding changes, and much more.
Single parents, who commonly face greater financial and time pressures than most, should pay particular attention to Budget announcements. Rules may change around eligibility for and the level of benefit provided by various social security pensions, allowances and concession cards. This can affect choices around acceptance of paid work, child care choices and many other important decisions.
For retirees and pensioners there is so much that can change as a result of a single Budget, from policies around the treatment of superannuation and its related entities and earnings, to new opportunities within the workforce for those interested in planning their transition to retirement, and even to rules around selling your family home. The 2013 Federal Budget, for instance, announced an allowance for an amount of up to $200,000 from the sale of the family home to be invested, with exemption from the Age Pension means test for up to ten years.
And the list goes on. Those with specific medical issues or who require certain types of expensive medicines or who provide care for the disabled are all likely to find their financial situations changed after a Budget announcement. People working in particular industries – farmers, construction workers, tradespeople, doctors etc. – could recognise new opportunities or risks when the Government makes or cancels investment in certain schemes. And entrepreneurs may or may not benefit from arrangements aimed at increasing employment opportunities by creating and growing new businesses.
There are very few members of society who are truly unaffected by the Federal Budget. Its potential influence on business and capital investment decisions they make may impact those with investment portfolios.
Treasurer Joe Hockey has been talking up this year’s Budget as one that will be conservative, that will make some difficult cuts and that will be intended to help reduce the current deficit. It will likely affect everyone. Be sure to check out the many forms of media analysis in the days following the Budget’s delivery, and speak with your financial advisor if it presents any concerns.
If you would like to know more, click here to speak with a Robson Partners financial adviser who could give you more detailed information on the best approach for your situation.