2019-20 Pre Budget Submission

I hear so many people complain about the Federal Government and what it does or does not do in its budget. And that’s why I make a personal submission to Treasury and Finance as part of the Government’s Pre Budget Submission. This year I was one of less than 300 published submissions made as part of this process.

In my mind, less than 300 published submissions is not good enough. If you want to make change, you can’t sit back and do nothing.

Maybe you don’t do it because you feel no one will listen!

Well I disagree. Last year a couple of my ideas actually made it into the budget, I can’t say they were solely because of me, but I am sure I helped in some way through my submission.

There is no excuse not to express your opinion directly to the people who make the decisions.

And with the budget due out next week, I thought I would share a summary of the budget submissions I made this year.

My budget submission this year was was focused on what the Federal Government can do towards:

helping people improve their retirement outcomes;
providing affordable housing; and,
ease some of the administrative burden faced by small businesses.

If you want to read the full budget submission you can find it here https://treasury.gov.au/sites/default/files/2019-03/360985-The-Wealth-Navigator.pdf

In summary they are:

1. It’s time to remove some of the complexity around the calculation of superannuation guarantee contributions. It would be far simpler that any payment made to the employee which is subject to pay as you go income tax (their gross pay for that pay period) is included in the calculation to determine how much superannuation guarantee contributions are to be made. Irrespective of how the employee earned it. And there is no minimum threshold.

2. If you want to increase the stock of affordable rental accommodation, the Government needs to provide an incentive to the landlord. I propose that this incentive is equal to the GST paid on the new property, rebated over 10 years, providing the property is provided for affordable housing in conjunction with approved community housing providers.

3. In order to reduce the gender superannuation gap, get more engagement in superannuation and better retirement income projections, couples should have the option to place their combined superannuation into a “couples” joint superannuation account.

4. The Workplace Gender Equality Agency (WGEA), is the federal funded agency tasked with improving gender pay equality, but it as the data shows, it does not appear to be making any significant inroads. Changes need to be made to both The Workplace Gender Equality Act 2012 and the funding of the WGEA, if any progress is to be made.

5. Currently there is a large incentive for couples to income split to reduce tax. In order to eliminate this, the government should consider developing a tax system that taxes couples as one tax unit.

6. The pension system in Australia was designed as a safety net for Australians financially disadvantaged in retirement. But I believe this is no longer the case. The pension system in Australia has now evolved to a supplementary benefit for those who have not saved enough to be comfortable in retirement. And this bears no relationship with whether the person was financially disadvantaged during their life. For example, a high income earner can spend all their money and get the same pension as a low income worker who never had the chance to properly save for their retirement. In my mind this means that the Australian Pension system rewards spending over saving. And this needs to change.

Let’s see if any of these make the budget next week.

And next year, if you want changes made, why do you too make a budget submission as part of the Pre Budget process

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Wayne Wanders

The Wealth Navigator

wayne@thewealthnavigator.com.au