A Budget of opportunity for investors

To the relief of some Australian investors, the government has largely left superannuation untouched in this year’s Federal Budget. Instead, incentives to make housing more affordable, increased funding for infrastructure, and reforms for our big four banks and Macquarie Bank are on the cards. But, will these measures truly create the opportunities investors are looking for to secure a better future for themselves and their families?

Nerida Cole, Dixon Advisory’s leading superannuation expert and Head of Advice, provides an exclusive round up on what she considers are three of this year’s most prominent Budget proposals.

Easing housing affordability

Is it possible? Yes, we think so.

  • This needed to happen – the housing affordability package includes extensive measures to improve housing affordability for Australians.
  • First home buyers may benefit from being able to contribute to super to save for a house deposit – with potential tax incentives to help.
  • We believe the BIG draw for parents looking to help their children is that you can also make aftertax contributions into their super to help them out with their deposit (up to a certain amount).
  • Over 65? If you’re tempted to downsize your home, contributing up to $300,000 from the sale of your home into your super (that’s per person) may save you tax and protect concession card entitlements. And the best bit? Age and work tests won’t apply to contributions funded by these proceeds, and neither will the $1.6 million total super balance test.

Stimulating growth through infrastructure spending

Will it work? Wait 10 years to find out – that’s the projected timeline for some of these projects.

  • On the plus side, the government will inject $75 billion to funding rail and road projects from Western Australia to New South Wales, Victoria and Queensland – this is likely to create jobs and activity in sectors beyond mining and property.
  • One reason to be skeptical is that large-scale infrastructure projects don’t always run to plan – they can be complex to manage, and at some point, the government debt needs to be repaid.
  • As with many infrastructure projects, careful management and transparency are generally required to ensure taxpayers benefit.

Shaking up the banking sector through reform

What will this do for me? We believe it may pave the way for some competitive rates in the longer term.

  • The government proposed a new 0.06% levy on the earnings of the big four banks (plus Macquarie Bank), which the banks aren’t happy about – and customers and shareholders are understandably nervous.
  • The government also wants to make banks more accountable by introducing a new regime of regulatory and compliance measures, including hefty fines for breaches.
  • The good news? Even though share prices may face some pressure, we believe stability is not a concern for the major banks. Smaller banks could also benefit if the major banks raise interest rates on home loans to make up for the levy short fall – and that’s probably good for competition.


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Nerida Cole

Managing Director, Head of Advice

Nerida is a highly respected expert on superannuation, including self managed super funds (SMSF), retirement planning and wealth-building strategies. Through her role she works closely with Executive Chairman Daryl Dixon, Director of Quality Management Stephen Bone and the Compliance team to keep the firm’s financial strategies at the forefront of the latest legislative requirements.

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