The May 2016 Federal Budget Will End Superannuation As We Know It

On 3 May 2016 the Australian Treasurer, Scott Morrison, handed down his first Budget and changes to superannuation were a core theme.

While there is plenty of focus on things that are perceived as negative changes, let’s not forget there are also some important changes that are potentially quite good news.

It is important to note that the Budget measures will not become Law unless Legislation to support the measures is passed in Parliament. Until that time, the Budget measures are simply a proposal.

A detailed summary of the 2016 Federal Budget has been prepared by The Financial Planning Association of Australia and is available via the following link:

2016 Federal Budget Summary

HOT TIP: In relation to superannuation reforms, most of the 2016 Federal Budget measures are planned for a 1 July 2017 commencement so there is plenty of time to plan.

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What Does It Really Cost Retirees To Live In Retirement?

According to new figures from the Association of Superannuation Funds (ASFA), the costs of living in retirement have risen further. The following table provides a summary of the ASFA findings for retirees who are debt free home owners:Retirement Costs


A Rise In The GST Is Probably On The Way!!

The 2014 Budget has not been very well received and with all the media coverage you would think that all of the bad news was now out in the open.

By using the Budget as a mechanism to starve the States and Territories of cash, the Government has effectively created a way for agreement to be reached to increase the GST. The clever part about the strategy is that the Government will not be asking for the GST to be increased but the States and Territories will be begging for it.

I can see Tony Abbott in a year or so explaining to the Australian people that he did not want to increase the GST but only allowed it to happen because the States and Territories begged him too. It’s a clever political strategy.

So what is the bottom line: get ready for the GST to be increased and for it to be broadened to include food, health services and education.

Not sure what to do……at least you now know who to call.

Very Important News For Anyone Who receives A Full/Part Age Pension!!

Click Here — Age Pension Flyer

Many people may not be aware of a change to Superannuation Legislation that became law a few weeks ago. The change means that from 1 January 2015 all new Account Based Pensions (formally known as Allocated Pensions) will be “deemed” under the Centrelink Income Test rather than having the currently more generous Income Test assessment arrangements.

What most people may not know is that if after 1 January 2015 an Age Pensioner decides to change their existing Account Based Pension to a new provider to reduce fees then the new rules will apply to the new account. As a result, some Age Pensioners could lose part of their Age Pension.

Fortunately there is a window of opportunity between now and 1 January 2015 for Age Pensioners to get advice and make any changes to ensure they save fees and do not lose any Age Pension entitlements.

If you know anyone who this might affect then let them know asap.

Not sure what to do………at least you now know who to call.

Why Is It That Politicians Consistently Make Promises They Can’t Keep??

With all of the ideas being floated in the media at the moment about possible Budget announcements on May 13, you could be forgiven for wondering what on earth is going on.

It seems the Government likes the idea of floating/leaking policy ideas and gauging public opinion before breaking promises. I guess that’s just politics but I am amazed at suggestions for example: a Levy is not a Tax.

I have no doubt the Budget on May 13 will introduce some massive changes to reign in expenditure and increase revenue, and I agree some things need to change as Australia is not currently living within its means. It is unlikely to be a popular Budget and it will mean a bit of pain for everyone to make sure we all have a brighter long term future as a nation.

Not sure what this all means?……………….I will post a Budget update on May 14/15 to help everyone make sense of it.