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The federal budget has been handed down, and it’s a pre-election blockbuster. REB takes a look at what this means for real estate agents.
The Morrison government’s 2019–20 budget delivers a surplus for the first time in over a decade. The big-ticket items likely to affect the Australian real estate industry are lower taxes, relief for small businesses, and infrastructure and community investment.
In delivering it in Canberra last night, Treasurer Josh Frydenberg said that the government is delivering lower taxes by providing tax relief to low and middle-income Australians.
This includes immediate relief of up to $1,080 for singles, or up to $2,160 for dual-income families, and structural reform so a projected 94 per cent of Australian taxpayers will face a marginal tax rate no higher than 30 per cent in 2024–25.
The government is also providing lower taxes to small and medium-sized businesses by increasing the instant asset write-off and expanding access to it alongside the lower tax rates the government has already legislated.
At the same time, Mr Frydenberg said that the integrity of the tax system will be safeguarded by ensuring everyone, including multinationals and big business, “pay their fair share”.
Infrastructure
A major focus of the budget is the significant increase in infrastructure spending to $100 billion over the next decade.
Mr Frydenberg’s budget papers said that this recognises its role in managing population growth, easing congestion and ensuring towns and regions are better connected.
The spend includes a new fast rail plan, an increase in the Urban Congestion Fund, an additional $1 billion for the next phase of the Roads of Strategic Importance initiative and $15.6 billion for additional road and rail projects across the country.
Mr Frydenberg also said that the government is continuing to guarantee the essential services “on which Australians rely”.
Communities
He said that it will do this by strengthening Medicare, providing more affordable access to medicines, continuing to strengthen Australia’s aged care system, providing $291.6 billion for government and non-government schools, lifting student outcomes and investing $525.3 million to modernise the vocational education and training sector.
Mr Frydenberg added that the government is investing in communities by ensuring an “affordable, reliable and sustainable” energy system, improving local infrastructure, upgrading regional communications connectivity, addressing local environmental issues and boosting tourism.
He also said that $328 million would be provided for women’s and children’s safety, and that there are going to be programs to keep children safe online and better support Australians through drought and natural disasters.
Future
Mr Frydenberg said that the budget reinforces the government’s commitment to investing in Australia’s future by strengthening the economy and guaranteeing essential services, while keeping taxes low.
He said that Australia’s economy remains in a fundamentally good shape.
“Employment growth has been strong, with over 1.2 million jobs created since September 2013. The unemployment rate is at its lowest level in more than seven years and the participation rate is at a near-record high. However, there are a range of risks both domestically and abroad.”
Mr Frydenberg said that the plan for a stronger economy is based on fiscal discipline and policies that enhance the economy’s productive potential.
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