What Does a Morrison Government Mean for You?
Economic management was the key theme of the 2019 election, in which Labor had campaigned hard on tax re-distribution, changes to franking credits and negative gearing. These changes were set to impact Australians’ retirement balances, and retirees and workers alike let Labor know their displeasure at the polling booth.
Earlier in the year, the Coalition was able to deliver what it termed a ‘back in black’ surplus, and Morrison had few complicated and worrisome economic reforms to explain to Australians before they voted.
By contrast, the Shorten opposition had a much more complex and difficult case to argue when it came to how they would manage the economy, which ultimately left the majority of Australians with more confidence in a Morrison Liberal government.
Australia voted for stability over change!
Housing was a major issue in this year's debate, with the Coalition announcing last-minute policy initiatives a week out from the election. Meanwhile, the Opposition held fast to its policy on negative gearing, despite knowing a portion of its core voter base could potentially be financially worse off.
The Coalition promised to lower the 32.5 % income tax rate to 30% in 2024-25, increasing the reward for effort by ensuring a projected 90+ percent of taxpayers would face a marginal tax rate of no more than 30%
The Morrison government super policies differed from Labor, where they are set to allow voluntary superannuation contributions (both concessional ‘pre-tax’ and non-concessional ‘after-tax’) to be made by Australians aged 65 and 66 without meeting the work test, from 1 July 2020. People aged 65 and 66 will also be able to make up to three years of non-concessional contributions, using the bring-forward rule.
Those up to and including age 74 will be able to also receive spousal contributions, with Australians aged 65 and 66 no longer needing to meet the ‘work test’.
Currently, people aged 65 to 74 can only make voluntary superannuation contribution only if they self-report as working a minimum of 40 hours over a 30-day period in the relevant financial year. Those aged 65 and over cannot access bring-forward arrangements and those aged 70 and over cannot receive spouse contributions.
The newly re-installed Liberal Coalition government will be encouraged to make good on its budget promise to make permanent the current tax relief for merging superannuation funds, that is currently due to expire on 1 July 2020.
Since December 2008, tax relief has been available for superannuation funds to transfer revenue and capital losses to a new merged fund, and to defer the taxation consequences on gains and losses from revenue and capital assets.
This tax relief will be made permanent from 1 July 2020, ensuring superannuation fund member balances are not affected by tax when super funds merge.
This important change will remove ‘tax issues’ as an impediment to super fund mergers, which is consistent with the recommendations of the Productivity Commission, who recently released its final report into the Superannuation industry.