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Overwhelming: Taxes about to increase as cost of living gets tighter Posted on October 10, 2022
Federal Treasurer, Jim Chalmers has indicated that some tax and revenue measures may need to be adjusted (aka increased) in the next annual Federal Budget in May 2023, or as soon as 25 October when a mini budget is scheduled to be presented to Parliament. With interest rates and everyday expenses also rising, it’s important to take control of your money before outside influences start to control you.
Australia remains one of the lowest-taxing countries in the OECD with federal and state revenues 5.8% lower than the developed country average. So, Chalmers and his colleagues are considering how to balance this out, and that can only mean one thing…higher taxes.
We’re likely to find out more about where the government intends to find this money from the Annual Revenue Summit to be held at the end of this month. There’s speculation that the highest tax bracket may be targeted, as well as caps for the number of assets a person can write off for tax purposes and the amount a person can hold in superannuation for tax benefit.
This, in light of the rising cost of living, is what most Aussies will interpret to be unwelcome news. Interest rates are at 2.6% with indications it will continue to rise through to 2023. Variable mortgagees are paying more per month, and new borrowers are wary not to borrow at their maximum, pushing property values down.
Day to day fees are increasing to cover the cost of increasing fuel, energy, supply and overhead costs and it begs the question of what one should do now to protect current living standards.
While there’s no clear answer, there is a clear action that any Australian can take, and that is to create a personal budget. A thorough and complete calculation of moneys coming in and going out so that you can see where there’s wriggle room (or where there’s not), cap unruly costs or wastage and plan accordingly.
The next step is to seek professional advice. If there are gaps in your long-term plans or barriers to future growth, a Financial Planner can adapt your approach and introduce options to help you be better off in the long run. This especially relates to your superannuation, personal insurances, investments and asset growth. To speak to a member of our qualified and authorised Financial Services team, contact [email protected]