2019 Federal Budget Review

About the author:

Terri Bradford
Author name:
By Terri Bradford
Job title:
Director, Wealth Management
Date posted:
03 April 2019, 7:30 AM

In this "election" Budget, the Government has played a relatively safe hand. There were no big surprises from a financial planning point of view. The anticipated personal income tax cuts were handed down as was the small business instant asset write-off extension. Thankfully, changes to superannuation were also kept to a minimum.

Personal Income Tax Cuts

The Government made some changes to its 7-Year Personal Income Tax Plan introduced last year. Specifically, the low to middle income tax offset (LMITO) will effectively double which means singles could receive up to $1,080 instead of $530, and couples up to $2160.

Additionally, the low income tax offset (LITO) will increase to $700 from the 2022/23 financial year. It was previously due to increase to $645 from this time.

Also in 2022/23 year the 19% tax threshold will increase to $45,000 instead of $41,000 per the original plan, and the 32.5% threshold will increase to $120,000.

In 2024/25 year the 32.5% tax rate is proposed to reduce to 30%.

Small Business

The instant asset write-off for small businesses continues to be the gift that keeps on giving. The $20,000 limit was recently increased to $25,000. The Government has now announced a further increase to $30,000 to 30 June 2020 and will also extend access to medium-sized businesses with annual turnover of up to $50 million.


Superannuation changes were thankfully kept to a minimum. Retirees who are 65 and 66 years of age will be able to contribute to super without meeting the 40hr work test from 1 July 2020. This aligns superannuation contribution eligibility rules with the eligibility age for the age pension, which is due to increase to 67 years of age from 1 July 2023. To ensure continuity with current contribution rules and limits, individuals aged 65 and 66 at that time will also be able to utilise the 3-year bring forward limit of $300,000 for non-concessional contributions.

The spouse superannuation contribution age limit will also be extended from age 69 to age 74.


All in all, this was very much an Election Budget – light-weight but an attempt to target the areas the Government hopes Australians will react positively to. It's a tall order but the proof will be in the pudding following the Federal election result in May this year.

More information

Clients can login to view my full 2019 Federal Budget Review here or access more analysis by clicking on 'Wealth Management' in the popular topics list to the right of this page. Alternatively, contact your Morgans adviser or nearest Morgans branch.

Disclaimer: The information contained in this report is provided to you by Morgans Financial Limited as general advice only, and is made without consideration of an individual's relevant personal circumstances. Morgans Financial Limited ABN 49 010 669 726, its related bodies corporate, directors and officers, employees, authorised representatives and agents ("Morgans") do not accept any liability for any loss or damage arising from or in connection with any action taken or not taken on the basis of information contained in this report, or for any errors or omissions contained within. It is recommended that any persons who wish to act upon this report consult with their Morgans investment adviser before doing so.

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