Federal budget could deliver ‘nasty’ surprises
Colonial First State has warned that the upcoming October federal budget will likely have a big focus on savings measures.
Speaking in a recent podcast, Colonial First State senior technical manager Julie Fox noted that the Labor government has previously announced it will have its first federal budget on 25 October this year.
“The Treasurer warned us in late July that economic news would be confronting when Parliament recommences especially concerning inflation, interest rates and real wages,” said Ms Fox.
“So, the government will definitely be looking for savings in the budget.”
Speaking in the same podcast, Colonial First State head of technical services Craig Day noted that the previous budget before May was just before an election and was therefore bound to have a lot of giveaways.
“But on the flip side of that you get to the new government’s budget and that’s when they start being nasty because hopefully if they’re nasty then, then there’s two years for people to forget about it,” said Mr Day.
“We may well see some savings measures introduced especially considering the last two-and-a-bit years and all the spending that’s gone on and the damage that’s been done to the federal budget.”
Mr Day discussed the possibility of the government freezing indexation of the general transfer balance cap in the budget this year as a potential savings measure, as previously reported.
Labor has already made moves on a number of its election promises.
In early August, Labor introduced a bill into Parliament to reduce the eligibility age for downsizer contributions from 60 down to 55.
Labor has also introduced a bill into Parliament to increase the thresholds for the Commonwealth Seniors Health Card, which was another measure announced in the lead up to the election.
The bill will see the threshold for singles increased to $90,000 from the current $57,761 and up to $144,000 for couples, up from $92,412 currently. The measure was previously announced in the lead up to the election.
If passed, the bill will apply from 20 September 2022.
Minister for Financial Services Stephen Jones has also moved to address education standards in the financial advice industry, announcing that Treasury will develop a consultation paper on options to "streamline the education requirements for financial advisers".
Miranda Brownlee
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.
