The Coalition won the 2013 Federal Election with a majority of seats. The Coalition now plans to implement a number of initiatives such as changes to taxation and superannuation. Below is a summary of the changes. All changes must be passed by both levels of parliament and made legislation.

Superannuation

  • Delaying the Superannuation Guarantee (SG) increase to 12%. The current 9.25% SG will remain in place for another two years and is not anticipated to reach 12% until 2021-22.
  • The low income earning contribution of $500 will be scrapped.
  • Contribution caps and co-contribution will be reviewed with the intention to increase once the Budget is back in surplus.
  • Penalties for a breach in the contributions cap will be reviewed to give more lenience for genuine mistakes.
  • Improve superannuation fund member reporting.
  • Undertake a review of default super fund selection to increase competition and transparency.
  • Review pension minimums to ensure the current levels are adequate in today’s market conditions.

Taxation

  • Reduce the company tax rate by 1.5%.
  • Abolish Carbon Tax and Minerals Resource Rent Tax.

Other

  • Paid Parental Scheme – this will provide leave at a woman’s full replacement wage for 26 weeks including super contributions.
  • Develop a new agreement for Aged Care.

Impacts to the Budget and Financial Markets

  • Aim to return to surplus by 2016-17.
  • Expect a mid-year budget / economic outlook in November. This may include some aggressive savings measures.
  • Australian shares have risen after federal elections for the last 30 years.
  • Share market tends to perform better under a Coalition Government history tells us.

Risks

  • The changes to the Senate will not be implemented until June 2014. This means that the Senate which is mainly dominated by the ALP and Greens can restrict any progress and policy changes from the Coalition in the House of Representatives.
  • Long-term growth may and the boost of confidence may be offset in the short-term if the Government is aggressive in spending cuts.

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Thomas Jacks BCom (Acc), SMSF SpecialistTM, Adv. Dip F.S. (FP)
“I want to be able to assist clients with their investment and retirement planning by providing real strategy advice. It’s my aim to not only help my clients but to educate them by addressing the entire picture” Google Plus

Categories: General News, Shares, Superannuation   |  Posted on
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