Just like you and I the Government has to work out how much income they are going to earn for the year (taxpayers money) and what they are going to spend it on.  Each May they reveal their budget and whether or not they are going to change any of the rules surrounding Super. This is a quick summary of the key policies that may be of interest to you that were announced last week in the budget.

Downsizing into Super

Retirees aged 65 and over who downsize their family home will be able to contribute up to $300,000 of the proceeds into superannuation as an after tax contribution and will be exempt from the work test.   This applies to people who sell their main residence having owned it for at least 10 years. Couples will also be able to use it for the same home, making contributions of up to $300,000 each.

 

First Home Super Saver Scheme

In a move aimed at helping first time home buyers build a housing deposit, the Government proposes to allow voluntary contributions to super funds to be withdrwawn from 1July 2018 onwards for the purposes of buying a first home. Contributions into a super fund will be allowed by salary sacrifice up to a maximum of $15,000 per year to a maximum of $30,000 in total.  Employees will still need to pay compulsory super guarantee payments to individuals who make these contributions.  Withdrawals will be taxed at your marginal tax rate less a 30 per cent offset – effectively making withdrawals tax-free for anyone earning up to $87,000.

Financial’s – The bank levy

The most controversial policy announcement on budget night was the proposed bank levy on major Australian banks. The government will apply a 0.006% per annum levy from July 2017 on the major Australian banks (NAB, CBA, WBC, ANZ, MQG) with liabilities greater than A$100bn. The implications are far reaching but how they will eventually play out remains to be seen. The most obvious implications (i.e. response from the banks):

The Budget, Super and Investments - Super Equity

  • Higher interest rates on loans (& potentially reduced lending)