Image from The Daily Telegraph, 10/5/17
Here at Really Simple Money we love Budget week – it brings out the best in usually serious commentators, politicians and economists.
Of course, it’s all incredibly serious stuff. Which is why The Daily Telegraph photo shopped the Treasurer’s head on a man wearing a white suit with a link to a Shazam song: “Tough love, you’ve had your share. Time to lighten up and enjoy Budget repair…”
But what’s really in it for us?
The idea of saving through Super for a housing deposit is great – if you’ve got about a decade to wait. Savers can now salary sacrifice into super on top of the 9.5 per cent compulsory contribution to super – and use the additional sum, up to $30,000, for a deposit.
As one young Sydney business woman said: “We’re looking in the city’s Eastern suburbs, so a deposit for us is about $150,000”.
There are tax gains, of course, by using salary sacrificed money. But you need disposable income to save.
And bizarrely, our brightest economic minds still can’t get their heads around why we are not spending more, even though Australians have had the lowest wage growth in decades, and are facing cost of living increases.
But at least Treasurer Scott Morrison is upbeat about our economic future – and prepared to splurge huge amounts of government money into major schemes like roads, rail, education and energy that will prime the economic pump.
And he predicted wage rises of 2.5 per cent in 2017-18, and three per cent the next year. The cost of living will rise 0.25 per cent to 2.25 per cent by 2019. And the jobless rate should fall 0.50 per cent to 5.25 per cent by 2020.
But the bad news is that an 0.5 per cent increase in the Medicare Levy in two years, and a $400 average impost to help those with disabilities, will hurt.
But the big news is all about the banks, and that $6.2 billion levy.
Never have we heard a Treasurer tell banking representatives, as Morrison did to Anna Bligh, CEO of the Banker’s Association: “Pony up! No one likes you anyway…”
Asked about the bank’s reaction, Morrison replied with that immortal Justin Timberlake song: “Cry me a river…”
Perhaps he is hoping the $26 billion in corporation tax cuts he has given the rest of big business will mean he is not a complete outcast at the top end of town.
Money, as Dire Straits might say, for nothing.