On 8 May 2018, the Treasurer Scott Morrison delivered the Government’s 2018/19 Budget. With the next Federal election coming up within 12 months, this Budget is a key political tool for the Government that benefited from a recent uplift in the economic performance and improved fiscal results compared to prior years. They have taken advantage of this by announcing a range of personal income tax rate cuts, as well as continuing with their push to roll out company tax rate cuts to the bigger end of town – a plan that may prove politically difficult to implement following the recent revelations in the wake of the Royal Commission into the Banking, Superannuation and Financial Services industry.
The personal tax cuts are the cornerstone of the Budget, however these are scheduled to be implemented over seven years and two Federal election cycles. Furthermore, while the Treasurer’s economic outlook for the forward estimates period is positive, many commentators consider it to be overly optimistic. Both of these factors may prove insurmountable hurdles when it comes to passage of the announced measures through Parliament.
The Budget includes a few integrity measures, in particular for businesses and a number of welcome tweaks in the superannuation area.