Updated: Apr 17, 2019
Welcome to the Church of the Federal Budget, where the gospel is surplus, and the word is more than $300bn in personal tax cuts and government spending over the next decade.
Morrison is calling the $158bn in personal tax cuts a “dividend of good economic management”. Just in time; much talk was dedicated to the impact of falling house prices on individual household wealth, and expected further declines in building project commencements and household consumption.
Key measures and predictions announced last night included:
Tax rates – by mid-2024, 30 per cent is the most 94 per cent of Australians will pay in tax.
Consumption – tipped to grow over the next couple of years, despite housing market and weak income concerns.
Stimulus – it’s hoped $19.5bn in tax cuts over the next four years should give consumption a kick-along.
Wage growth – expectations have been revised down in the budget papers, but the government is banking on pay rises climbing above 3 per cent in the next two years. Note, these are much more optimistic than the RBA’s prognosis that wage growth will remain around 2.5 per cent.
Global economy – a slowing global economy has apparently been taken into account.
Infrastructure – a $100bn package to fund road and rail projects over the next decade. Did someone say “fast trains”?
Skills shortages – up to 80,000 new apprenticeships for industries facing skills shortages.
There are quite a few winners and losers lists floating around this morning, but the bottom of the barrel was dredged for the latter column. This one is my favourite…apparently, motorcycle gangs didn’t fare too well last night.
You’ll find a calculator here to help determine how the budget will affect you as an individual. You’ll also find a wrap-up here on how the budget will impact the property industry.
But the fun doesn’t stop there! There is another $3.2b in spending measures to be announced in lead-up to the next election, which will be called this week; most likely either May 11 or May 18. And the celebrated surplus isn’t here yet; it’s just a forecast, and the government is yet to deliver one.
Of course, most of this is just talk unless the Coalition is returned to power on this auspicious date. Much of this budget has been designed to make the economy the key election issue, and let voters know that the party in government is the more fiscally responsible.
The budget wasn’t the only game in town yesterday.
In fantastic news for anyone using building approvals to gauge market sentiment, apartment approvals surged upwards in February, with total new dewelling approvals rising 19 per cent month-on-month.
Fancy getting a home loan from a super fund? Fintech start-up Athena Home Loans is looking to partner with super funds as one non-bank source of capital for home lending. Hostplus has invested in the platform.
Metro Property Development has quit the apartment market after reporting a 59 per cent fall in operating profit. It’s consolidating and focusing on medium-density and detatched home building instead.
Echoes of Opal Tower were heard on the Collins Arch site yesterday, where Multiplex has halted work after detecting movement in precast structural columns of the half-built twin-tower project.