Search

Budget, Budget Budget! BUT WHAT'S IN IT FOR ME???

Jenine Garcia
May 15, 2017
3 min read

So, there has been a lot of back and forth in our inbox over the last few days, with lots of people sending us information on the 2017 Budget as announced by the Treasurer Scott Morrison last Monday night.

BUT WHAT DOES IT ALL MEAN???

The big question on everyone’s lips is of course……

WILL THE BIG BANKS PASS ON THE COSTS OF THE NEW BANK LEVY?

First and foremost, it is important to recognise that the new tax is only applicable to the Big Banks. The banks are held accountable by different governing bodies. These include the ACCC (Australian Competition and Consumer Commission) and APRA (Australian Prudential Regulation Authority). Like most industries, the banks cannot just make up their own rules, and it is anticipated that both governing bodies will be keeping a close eye on the big banks to make sure any increases in rates and fees are justifiable.

Our advice, however, is to always be mindful of the fees and charges you are being charged by your bank. Banks do enjoy a great deal of consumer loyalty, and it is only the actions of customers that will make them work for your loyalty. Always consider what you are paying for and whether you can get better value elsewhere.

Remember, this levy is only applicable to the Majors. There are lots of different options if you feel that you are not getting a fair deal.

Opinions below:

Let’s also remember that the big banks have consistently been announcing increasing annual NPAT (Net Profit After Tax), and in 2015 and 2016, profits reached figures of between $6,000,000,000 and $10,000,000,000. Half yearly reporting has indicated that this year will be no different. The following table puts the annual levy per bank into perspective:

PROPOSED ANNUAL 5,000,000,000 10,000,000,000

NET PROFIT AFTER TAX

PROPOSED ANNUAL 300,000,000 300,000,000

BANK LEVY

PROPOSED PERCENTAGE 6% 3%

OF ANNUAL NPAT

PROPOSED PERCENTAGE 94% 97%

OF PROFIT RETAINED BY BANKS

PROPOSED NET PROFIT AFTER 4,700,000,000 9,700,000,000

TAX POST LEVY

Apart from the proposed bank levy, naturally everybody wants to know whats in it for them. We have summarised the main points below with links to more information if you are interested.

SMALL BUSINESS ASSET WRITE OFF CONTINUES

THE GOOD:

Extension of the $20,000 instant asset tax write-off for another year, with revenue ceiling up from $2,000,000 to $10,000,000
Commitment to drive company tax cuts for ALL Australian businesses
$300M commitment to State Governments to reduce small business compliance costs

THE BAD:

Costs to business for employing foreign workers
Possible flow on costs associated with targeting “black economy” through courier and cleaning industries

Read more in the following links:

FOR ALL AUSTRALIANS……..

FIRST HOME BUYERS

BENEFIT

THE GOOD:

Increase in spending for childcare over 4 years
No annual cap on Child Care Subsidy for parents earning up to $185,710
Funding for all Australian children to gain access to 15 hours per week of preschool programs
Additional $18.6 billion allocated to schools over the next 10 years
Tax benefits for Retired Downsizers and First Home Owners
Levy on foreign investors retaining vacant properties
New funds to support training opportunities
Increased Health funding in several areas, from Public Hospitals to childhood cancer research and Mental health services
New infrastructure funding – including $5.3 billion for Badgerys Creek airport, and $3.6 billion for Western Sydney infrastructure to support population growth