The topic of debate prior to last night’s Budget was whether the ‘Stage 3’ personal tax cuts should proceed for the 2024/2025 financial year. For now, the Labor party’s position is to retain the former Government’s policy… but there is still the opportunity in next year’s Budget to reverse this position (or impose something like a Budget Repair Levy).

In a further expansion of the ‘Downsizer Contribution’ opportunity for individuals wanting to contribute proceeds from the sale of their home to superannuation, the Government intends to lower the eligible age to 55 years and above (currently 60 years and above). For further information on how this strategy might work for you, read our recent article here.

Families will benefit from an increase in child care subsidy rates, which will lift from 85% to 90% for families earning less than $80,000, before tapering down to zero for families earning more than $530,000. These changes will only come into effect from July 2023, meaning no instant reprieve.

The PPL entitlement for parents will increase progressively over the next four years. In each of the 2024-2027 financial years, the entitlement will increase by two weeks, reaching an ultimate increase of six weeks to a cumulative leave entitlement of 26 weeks by July 2026. Further flexibility will be available for parents to decide how to use their entitlement (concurrently or sequentially) and when.

The May 2021 Budget announced a relaxation of SMSF residency rules to provide SMSF members residing overseas with the same tax concessions as members of larger funds. This change was intended to take effect this year but has not yet been legislated and the Government has deferred the start date to allow sufficient time for the policy to be implemented.

Under a new Housing Accord, the Government has set an ambitious target of building one million new homes over the next five years. This is a collective effort involving Federal and State Governments, institutional investors such as large superannuation funds and the building and construction industry. How, where and when this Accord will be implemented is the key question, with different approaches likely for different locations and projects.

Following the Royal Commission in Aged Care Quality and Safety, the Government has increased the mandatory daily care minutes residents will receive to 200 minutes per day, including 40 minutes nursing time. A raft of other initiatives were also introduced, aimed at improving industry transparency and efficiency, capping fees and overhauling the complaints process.

As partners in your investment journey, we monitor, examine and navigate change. The Federal Budget is one such factor in our highly considered investment strategy and wealth management process.

This article is one part of our 2022-23 Budget series. To read more of our Budget commentary, click the links below:

• Small and Medium Business

• Economic and Fiscal Implications

For more information on our approach to wealth and investment management, please contact us on +613 9655 5000.