Australian Federal Budget 2018

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Australian Federal Budget 2018

05:18 23 July in Blog

The Australian Federal Budget was handed down on 8th May 2018.

With the next Australian federal election due to be held within the next 12 months, many are seeing this as an ‘election budget’. It should be noted that the measures outlined are subject to being passed by the Australian parliament.

The overall message regarding the Australian economy and growth was generally positive, with key economic stats including the following:

• The unemployment rate will fall slowly from 5.5 to 5.25 per cent by 2019-20.
• Australian Gross domestic product will grow from 2.1 per cent in 2016-17 to 3 per cent by 2019-20.
• The budget will be in deficit by $14.5 billion next financial year and will return to a slender surplus in 2019-20.
• Net debt will peak at $350 billion (18.6 per cent of GDP) in 2017-18 but is projected to fall to $319 billion by 2021-22.

Key measures introduced include:

• The Australian marginal income tax rate to pay 37¢ in the dollar will rise from $87,000 to $90,000 next year before being raised again to $120,000 in 2022-23.
• The 37 per cent Australian marginal income tax rate will be abolished entirely in 2024-25, with all Australians earning up to $200,000 only paying 32.5¢ in the dollar.
• $500 million over seven years for the Great Barrier Reef to improve water quality and address other environmental concerns.

However, in designing the most optimal cross border strategy with regards to pensions and Superannuation, the following outlined measures will be important to be considered:

• From 1 July 2019, self-managed super funds (SMSFs) will be able to increase the number of members from four to six. SMSFs who have clear audit reports for three consecutive years will be able to move to a three-year audit cycle.
• From 1 July 2019, members aged between 65 and 74 who have super balances below $300,000 will be able to make voluntary contributions in the first year that they do not meet the work test requirements.

For the full 2018 Australian Federal Budget Papers, please see

Should you have any questions with regards to the above, please contact us.