The 2018 Budget mumbo jumbo and what it means for you!
Since 2008 when Fair Go Finance started, I’ve really got to know what’s important to every day Aussies who are Fair Go customers. I know you work hard to be employed, you possibly receive some government assistance, you’re likely to be renting your home and currently live either in regional or metro Australia.
So what does the latest budget really mean for you, our Fair Go customers? Here’s what I’ve learned since the budget was announced and what I think will be of most interest to you.
My Overall Score:
Based on the below key topics of jobs, tax, housing, lifestyle, education and superannuation, I’d rate the budget 6.5/10. Here’s a breakdown as to why!
- There should be employment gains particularly in the construction sector, which will hopefully counteract the predicted residential construction slowdown. (It’s interesting to note that construction is the 3rd largest employer by sector.)
- Similar to oil & gas or iron ore projects boosting WA, specific new projects will impact areas in metropolitan and regional zones around the country. These include Bunbury, Bindoon & Perth in WA, the Outback Way connecting WA, NT and Queensland (grey nomads must have complained about this one) the Gold Coast, the airport link in Victoria, and Botany & the M1 in NSW.
- The health sector (hospitals, housing, nurses and mental health) will be getting some well needed love.
- New wage subsidies for older people will help the aging population plus the continued funding of the Skilling Australians Fund, has got to help their employment opportunities.
- If you do receive Newstart then this won’t be changing in any great way (and is grabbing a lot of the headlines).
- Wages growth is tipped to grow in the years ahead, by more than what it has in the past (which was not much).
- The new tax rebate isn’t life changing but it will definitely help. Given it’s up to $530 per year for people on incomes between $48,000 and $90,000 it will essentially help pay for your car rego, a tank of petrol each month, or maybe a power bill (but unfortunately not all three).
- There are other planned tax changes (such as abolishing the 37% tax bracket all together) but they are too far out to be considered as a benefit you can rely on anytime soon.
- If you owe the government any money, then they’re focused on tracking you down and have it repaid because more money will now be spent on data, systems and debt recovery.
- The government plans to pay down debt which will hopefully retain the government’s good credit rating. This helps interest rates stay low (affecting credit cards, loans and mortgages). If the surplus and debt reduction does not occur, unfortunately the opposite will occur.
- Interest rates are however, still forecast to increase because our household debt is so high (1.9x the size of the economy) and if this does happen, then housing should reduce in costs so it may be the time to consider getting into the market. There are housing cycles so saving this year could be a good idea.
- You should see more craft beers, but don’t expect to pay any less for it. The brewers are expected to pocket the lower taxes to make even more.
- Travel – the Aussie dollar will drop against other currencies if the forecast surpluses don’t flow though, which will make overseas travel more expensive. Plus getting in and out of the country will now be harder/take longer with more security being introduced at airports.
- If you buy black market cigarettes it will be harder to do this, so smokes will be more expensive for you. Time to give up!
- It should be easier to get medical assistance in rural areas as more doctors take up the Workforce incentive program.
- Early childhood education (National Partnership Agreement) and Youth allowance are all aimed to get people on the right track early in life, so these are good initiatives.
- Good protections are being introduced for low balance funds (up to $6,000). Insurances and charging certain fees by Superfunds are being scrutinised with the intent to stop them from reducing your super balance.
I hope you’ve found this quick 2018 Budget round up useful and relevant to what every day Aussies need to know!
Disclaimer: this is based on a read of the newspaper, a review of a number of websites and years of talking to customers.