Thanks for watching our Federal Budget video. I’m Graeme Miller, chief investment officer at TelstraSuper.
It’s been an early Budget this time round and it feeds into commentators’ speculation that an election is looming. The Government is predicting a $7.1 billion dollar budget surplus for 2019/20, equal to 0.4 per cent of GDP.
Tax cuts were the main focus of the budget and super was largely left untouched. There were however some changes to super – that if passed – could affect TelstraSuper members. It’s important to remember that for now these are just proposals and they require legislation before they can be implemented.
The focus this year was on measures aimed at older super fund members who still want to contribute to super. There were three key measures announced:
- Voluntary superannuation contributions (both pre and post-tax) will be able to be made by those aged 65 and 66 without meeting the work test from 1 July 2020.
- The bring forward rule that allows people up to age 65 to make three years’ worth of post-tax contributions will be extended to include people aged 65 and 66. In the 2019-20 financial year the post-tax contribution cap is $100,000 so this measure would allow people age 65 and 66 to potentially make a $300,000 contribution into super in one year.
- The age limit for spouse contributions to super will be increased from 69 years to 74 years.
The Budget papers mentioned amendments to the Protecting Your Super Package that was introduced last federal budget. The changes have been introduced in a new Bill called the “Putting Members’ Interests First Bill” and are currently before Parliament. If passed, they would see people under the age of 25 and those with super balances less than $6,000 need to opt-in to keep insurance within their super account from 1 October 2019.
The budget also included the announcement of over $600 million in funding that will be allocated to the government’s response to the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. This money will go to a number of initiatives including better resourcing of the regulators.
The Royal Commission aimed to bring to account behaviours which have been deemed unacceptable with prevailing community standards. This is aligned with TelstraSuper’s core value of putting members first and ahead of the interests of any other party. Most of the recommendations will have minimal impact on our members.
If you have any questions about these measures, or what they may mean for you please don’t hesitate to reach out to the TelstraSuper team. You can get general and simple advice about your TelstraSuper account over the phone at no additional cost – it’s part of your membership.
In the 2019/20 financial year we’ll continue to put members’ first and evolve our range of products and services to help you build a secure financial future. We look forward to sharing updates with you as the year progresses.