JBS Budget Update – May 2012

It’s that time of year again, when the Federal Treasurer delivers his plan for the coming 12 months, and even though you can never usually please everyone, you can at least please someone!  This budget is proving otherwise!

Last night Wayne Swan handed down his fifth budget, and it has been met with criticism across the board, from individuals, to retirees, to small business, to big corporates.

We’ve reviewed the budget and pulled together a selection of what we think matters to you most.  We have focussed on the superannuation changes which the government has proposed, however are happy to discuss the other announcements with you if you like.

Have a read and if you wish to discuss any potential implications to you, please don’t hesitate to give us a call on (03) 8677 0688 or email strategies@jbsfinancial.com.au.

To your success,
Jenny and the JBS Team

Overview

Last night’s conservative budget promised to deliver a surplus of $1.5 billion in 2012-13, which will be the first surplus since Labour came to power in 2007.  It aims to save $33.6 billion by reducing spending across almost every Government department and portfolio.

The Budget aims to share the benefits of the resource boom by using the mining tax to fund cash payments and tax breaks to families and low income earners and provide a supplement for students, the unemployed and parents with young children.  However, Mr Swan also stated that, in order to deliver these benefits, several previously announced measures would be abandoned.

In an unexpected move, the Government decided to defer the $50,000 superannuation concessional cap for individuals age 50 and over with account balances under $500,000.  The concessional cap will be $25,000 for everyone in 2012-13 and 2013-14.  This will likely result in a reduction in concessional superannuation contributions and an increase in inadvertent concessional cap breaches.

Contributions tax for individuals with income greater than $300,000 will be increased.  Concessional contributions for these individuals will be taxed at 30% rather than 15%.

We will look at the following segments in our update:

Superannuation

Taxation

Social Security and Aged Care

What went missing

To read our full article, please click here.