It has been billed the 'burger-and-milkshake' budget, with up to $10.19 coming to Australian workers per week in personal income tax cuts. There's a lot to unpack, so let's get stuck in!
Back in April, Deputy PM Michael McCormack claimed that the 2018 budget would contain some "goodies" for hard working Australians. He went so far as to label the budget's chief architect 'Scott "Santa Claus" Morrison'.
The Treasurer was quick to downplay the comparison while promising that the Grinch wouldn't be making an appearance either. Now that we have the nitty gritty details, it would appear that the truth lies somewhere in the middle.
"A Government living within its means" is the core tenet of the 2018 budget. With that said, a whopping $13.4 billion has been earmarked for personal tax cuts over the next three years, with the first wave of relief coming to low- and middle-income earners. Here's the good stuff you need to know about.
The big winners in this year's budget are Aussie workers earning up to $90,000 a year. (This is also where the majority of swing voters can be found - surprise, surprise.)
So how much tax are we getting back? People earning under $37,000 will receive a tax cut of up to $200. Workers will receive the tax cut as a lump sum in their July 2019 tax returns.
Those earning over $37,000 who pay 32.5 cents in the dollar will receive a annual tax offset of up to $530 per year, as will those earning between $48,000-$90,000. This works out to $10.20 per week, which is where the 'burger and milkshake' reference comes from. However, a household on a combined income of $96,000 will actually receive an extra $1060 at the end of the financial year which isn't too shabby.
Some people earning over $90,000 a year will also receive the tax offset, although the tax relief reduces to zero at just over $125,000.
Increase to tax thresholds
From July 1, 2018, the top threshold for the 32.5 per cent tax bracket will be raised from $87,000 to $90,000. This will benefit some 210,000 Australians who currently pay 37 cents in the dollar.
In the 2022-23 budget, the $37,000 threshold (at which tax payments jump from 19 cents to 32.5 cents in the dollar) will be lifted to $41,000. This means that 1.8 million Australians will no longer need to pay 37 cents in the dollar. In addition, the $90,000 threshold will be raised to $120,000.
There was also talk of completely abolishing the 37 cents tax bracket in 2024-25, which would see workers earning between $42,000 and $200,000 paying the same rate of tax. However, circumstances (and our acting government) are obviously subject to change, so we'll say no more about it.
Changes to superannuation
"Through the ATO we will be proactively finding your lost super and have it sent to your active superannuation account, ensuring it doesn't get eaten up in ongoing fees," Morrison said. The government is also pledging to ban exit fees on superannuation accounts if you choose to change funds.
No change to Medicare levy
As promised, the government will not be proceeding with last year's budget plan to increase the Medicare levy by 0.5 percentage points. This would have cost individuals on average full-time salaries approximately $400 per year.
Relief for oldies
The budget has allocated funds for a new Pension Loans Scheme for older Australians, including full rate pensioners and self-funded retirees. This will allow couples to boost their retirement income by up to $17,800. Eligibility for the pension and other benefits will not be affected.
Pensioners eligible for the Work Bonus can earn an extra $1300 a year without reducing their pension payments. The bonus will also be extended to self-employed individuals who can now earn up to $7800 per year.
Relief for parents with students
From January 1, it will be easier for regional students to access Youth Allowance with the Parental Income Test relaxed by an additional $10,000 per annum and an additional $10,000 for each additional child. Legislated needs-based funding for schools will deliver $24.5 billion in additional funding over the next 10 years.