Fedral Budget 2016 – 17
This year’s budget faced two challenges. First to serve as the Government’s main economic statement with sufficient sweeteners ahead of a likely July 2 election. Second, to provide more confidence that the budget is on track to a surplus to keep ratings agencies on side after they have recently started to lose patience.
The Government has arguably achieved a bit of the former via modest individual and small business tax cuts funded in part by a wind back in superannuation concessions for higher income earners but it’s not clear we are any closer to a budget surplus. Superannuation reform is in fact a key aspect of this budget.
- While the iron ore price has improved, the budget deficit is now projected to be $39.9bn in 2016-17 (up from $35bn in last year’s budget). Return to surplus is still not expected until 2020-21.
- Modest personal and corporate income tax cuts are largely offset by superannuation reforms and higher tobacco excise. There is insignificant fiscal stimulus.
- The budget may provide a small boost to confidence.
- Expect minimal impact on the sharemarket, but maybe a small boost to discretionary retail shares.
We hope you enjoyed Shane Oliver’s Federal Budget assessment.
We are here to discuss how the Federal Budget may effect your personal financial situation, please contact us.
See full document, which includes a speech by Shane Oliver: Federal Budget 2016 -17