{"id":2909,"date":"2021-05-13T18:03:00","date_gmt":"2021-05-13T08:03:00","guid":{"rendered":"https:\/\/saige.com.au\/?p=2909"},"modified":"2021-08-02T19:00:08","modified_gmt":"2021-08-02T09:00:08","slug":"2021-budget-impacts-to-your-financial-plan","status":"publish","type":"post","link":"https:\/\/saige.com.au\/individual\/financial-planning\/2021-budget-impacts-to-your-financial-plan\/","title":{"rendered":"2021 Budget Impacts to your Financial Plan"},"content":{"rendered":"\t\t
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As Winston Churchill once said, \u201cNever let a good crisis go to waste\u201d. He was working on forming the United Nations after World War II.<\/p>

The global COVID-19 pandemic, lockdowns and subsequent changes to working arrangements provided the perfect opportunity for structural reform. Get rid of the inefficient taxes such as stamp duty and payroll taxes that stifle growth and stop people from moving for work or employing more people. Real reform of our archaic tax system with root and branch reform. The Covid crisis would have provided both the political capital and public understanding needed for a modern system to allow the economy to grow, encourage business and to provide income for the government.<\/p>

Well, we didn\u2019t quite get that, but we did get a change of rhetoric! They have changed from ten years of \u2018debt and deficit disaster\u2019 and needing to balance the budget, to throwing all that out the window. Debt no longer matters as it\u2019s all about jobs and unemployment. $161b deficit? Nah \u2013 not a problem.<\/p>

Talk about a triple back flip with a half pike!<\/p>

This year\u2019s budget is OK \u2013 it\u2019s just a lost opportunity. Then again, I wouldn\u2019t be surprised if there was an election called early as there was also $10b of \u2018unallocated announcements\u2019.<\/p>

Sounds like an election war chest to me!<\/p>

The irony is that we do need to run deficits when the economy needs support. Which is also exactly what happened in the GFC, but that is another story.<\/p>

So, what are the changes announced in the budget relating to clients from a Financial Planning perspective? No huge changes, but there are a few good tweaks.<\/p>

  1. Concessional Contribution limit<\/strong> \u2013 the existing $25k is increasing to $27.5k per person allowing for a bigger tax deduction and getting more funds into Superannuation. (good!)<\/li>
  2. Non Concessional contribution limit<\/strong> \u2013 increasing from $100k to $110k per year. (also good!)<\/li>
  3. Transfer balance cap<\/strong> \u2013 Increasing the amount of super that can be moved into a tax-free pension will rise from $1.6m to $1.7m. (good but it doesn\u2019t help everyone)<\/li>
  4. Downsizer contribution<\/strong> \u2013 This allows you to contribute up to $300k each into super if you sell your home that you have owned for 10 years. Currently, you need to be over 65. This will be reduced to age 60 to align with the other rules around pensions. (good if you can use it)<\/li>
  5. First Home Super Saving Scheme<\/strong> \u2013 First home buyers (maybe your kids?) are able to salary sacrifice up to $15k pa and then withdraw it to buy their first home. The maximum amount was $30k and this has now increased to $50k.<\/li>
  6. Removing the work test<\/strong> \u2013 Currently, you need to meet a \u2018work test\u2019 if you are over 67 to contribute to super. This is being increased to 74 which will introduce planning opportunities for some clients.<\/li><\/ol>

    Of course, some of these still need to be legislated and would only come into force July 2022. We will be working through all the opportunities and will discuss them with you at your next review. If you have any questions before then, feel free to email us.<\/p>

    Now, where did I put my \u2018Back in Black\u2019 budget mug from 2019?<\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"

    As Winston Churchill once said, \u201cNever let a good crisis go to waste\u201d. He was working on forming the United Nations after World War II. The global COVID-19 pandemic, lockdowns […]<\/p>\n","protected":false},"author":5,"featured_media":2812,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"default","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"default","adv-header-id-meta":"","stick-header-meta":"default","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[8],"tags":[],"_links":{"self":[{"href":"https:\/\/saige.com.au\/wp-json\/wp\/v2\/posts\/2909"}],"collection":[{"href":"https:\/\/saige.com.au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/saige.com.au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/saige.com.au\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/saige.com.au\/wp-json\/wp\/v2\/comments?post=2909"}],"version-history":[{"count":0,"href":"https:\/\/saige.com.au\/wp-json\/wp\/v2\/posts\/2909\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/saige.com.au\/wp-json\/wp\/v2\/media\/2812"}],"wp:attachment":[{"href":"https:\/\/saige.com.au\/wp-json\/wp\/v2\/media?parent=2909"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/saige.com.au\/wp-json\/wp\/v2\/categories?post=2909"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/saige.com.au\/wp-json\/wp\/v2\/tags?post=2909"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}