Budget for the Budget

By Jason Fittler

Wayne Swann has come out warning of a horror budget, seizing on China’s slumping economy to highlight the slow down in the resources sector. This will lead to a fall in taxes collected at the same time as the Government needs to increase spending to stimulate the economy.

What the actual budget will bring I do not know but what I am expecting is some sort of increase in taxes for the higher income earner, a reduction in the number of people who qualify for government benefits including the health care card and an increase in taxes on Superannuation. I am also cautious on transition to retirement pensions and account based pensions as they could look to change how these work or are treated in the future.

For most of us there is little we can do to get ourselves prepared for any change nor should you given we don’t know what might happen. But for those who are close to retirement or thinking about setting up a transition to retirement pension, now would be a good time take a closer look and perhaps get set up. I can not guarantee that there will be any changes but I am fairly sure that if there is a change made in relation to pensions it will not be in your favor. To be eligible to start a pension you must be over 55 years old.

The budget will be handed down on the 12th of May, I am expecting a tough budget given the spending which the government has committed to, complied with the issue of a expected reduction on tax collected I would be surprised if anyone walks away happy this May.