8 Budget surprises that no one was expecting

Now the Budget dust has settled, our Yahoo7 Finance experts reveals the real Budget surprises you’ve probably missed.

Also read: Budget tax cuts will only help the rich get richer

Here are 8 surprises from the Budget that might not have had a lot of coverage:

1. The Treasurer talked about “open data” and the banks will be the first to be forced to have it. This will mean you’ll be able to ask the bank for all the info/data they have on you and you can preview it to make sure it’s right. You can even use it to switch loans or banks! By the way, because our banks have a pretty complete picture of what we buy via our credit and debit cards, if you were say going to an oncologist for cancer, they might know you could have trouble paying back your loan or your insurance policy could soon be expected to pay up. This info was explained to me by a director of one of our big banks!

2. To crack down on the black economy, if a tradie gives you a discount for paying cash and the bill is over $10,000, then you’ll be in trouble as the payer if you pay in hard, cold cash! You will be in the firing line so it will become a gamble to pay in cash.

3. Young people will be able to say no to life insurance inside their super funds, which is often totally unnecessary and can eat into the growth of a super fund, when the pay levels aren’t high. Someone under 25 with less than $6,000 in super can drop the life insurance option. Also, the maximum fee for someone with less than $6,000 in super will be 3%. Some people are charged as much as 9%!

4. There’ll be no exit fees when you leave your super fund for a better one.

5. A company like Trivago that sells us hotel rooms and other travel services will have to pay GST for a change, which will mean their hotel rates and other prices will go up.

6. The big digital disruptors might soon be forced to pay a revenue tax to make them pay some decent level of tax. There are two options on the table and we look like copying Europe, where it looks likely they will hit the big US tech companies with a special revenue tax.

7. The ATO has been given an extra $260 million to crack down on taxpayers who exaggerate their tax-deductible expenses. And more debt collectors will be on the beat!

8. It’s time to start making films, with an extra $140 million made available for directors to make films here in Australia! I’m already writing the script for the Mad, Mad World of Money Down under! Who will play Bondy, Skasey, Nathan Tinker and Clive Palmer?

Seven years of changes

The tax changes are complicated because they come in over seven years. However, the reforms are pretty simple in the first year and, as Labor says, it will pass these first year changes. So let’s just explain how your tax might change from July 1 this year.

Also read: Australia’s property market is slowing, and its not over yet

Many will get a tax refund

Here the changes are made up of a Low and Middle Income Tax Offset (LMTO). The 32% tax bracket currently goes from $37,001 to $87,000. From July 1, it will go to $90,000. This will make someone on $90,000 some $665 a year better off and inside that is the $530 tax offset.

One interesting point is that higher income people will benefit too because that change in the tax bracket, which will end at $90,000 rather than $87,000 also gives them $3,000 at the lower 32% tax rate, rather than the 37% tax rate. The gain for them should be around $135.

Taxpayers earning more than $90,000 will see their tax offset gradually reduced at a rate of 1.5 cents for every dollar earned over $90,000, until it cuts out completely at just over $125,000.

More than four million taxpayers earning between $48,000 and $90,000 will enjoy the full maximum offset of $530 a year – or $10.19 a week.

What’s a tax offset?

A tax offset was given rather than a change in the tax rate. By using a tax offset, it comes as a tax refund only to taxpayers in the income range of $37,000 to $125,000. If they changed the tax bracket percentage, then higher income people would have benefited because the lower parts of their income would have been taxed at a lower rate.

Who said Treasurers aren’t sneaky?

Are you in this list of winners?

1. Those earning up to $87,000 look set for a $10 tax cut.

2. Those who would’ve seen the Medicare levy raised from 1.5% to 2% to pay for the NDIS will effectively get a tax cut because this potential slug will be dropped. If you earn $100,000 a year, that’s a $500 windfall. This levy hike was going to be for anyone earning above $87,000.

3. Commuters one day will be winners, with a $24 billion boost to infrastructure projects, including a rail link from Melbourne to the airport. In Sydney, the Port Botany rail line will be extended to take freight and trucks off the roads. Queenslanders will get an upgrade to the Bruce Highway.

4. Reef lovers will like the promised $500 million to be spent on the reef’s protection.

5. All pregnant women will get the whooping cough vaccine for free.

6. Young spinal muscular atrophy patients will no longer have to pay $300,000 a year for vital drugs. Under 18 year olds will get what they need for $39.50!

7. Lifeline will get $34 million to help those in need of someone to listen to them.

8. Craft beer brewers will have a 40% tax reduction on small kegs, which will mean kegs will be rotated more quickly than if they were in bigger kegs so the beer will be fresher! However, it will be interesting if the brewers share the tax gain with us the consumers. I suspect not.

9. There will be more money for home care and an Aged Care Quality and Safety Commission will be set up to handle complaints about the system.

10. Budget deficit worriers will be happier, with the Treasurer likely to tell us that a surplus will show up earlier than expected. It was supposed to be 2021 after a deficit of $2.5 billion in 2020.

And now for the losers

1. Those earning $180,000, where the top tax rate kicks in, were expecting to see this level of income raised, which would have meant they might have dropped down a tax rate from 45% to 37%.

2. The Government loses $8 billion by dropping the proposed increase in the Medicare levy.

3. Air travellers with full body x-ray scans set to come to an airport near you! And restrictions to carry on stuff such as liquids, aerosols, etc. could be increased.

4. The ABC’s funding has been frozen for three years that will cost it $84 million and they’re not happy!

Lots of winners

Most Australians are currently on a win, though many don’t know it. Even if your economic life isn’t great now, it could be worse! If unemployment was rising not falling, if interest rates were rising not staying where they are, if taxes were rising and economic growth was falling, then the budget deficit would be getting bigger rather than smaller. Our outlook would be a whole lot worse!

You have to enjoy the good economic times, which this year and next will start bringing with better wage rises. In bringing tax cuts and more growth, this Budget helps our futures look brighter.