Super changes, the Budget and 2021 versus 2022
Insight from Morningstar…
The 2021/22 Budget handed down by Treasurer Josh Frydenberg this week delivered many welcome changes to superannuation. However, they are subject to legislation and at best, the start date will be 1 July 2022. The changes are non-controversial, and even if there is a different party in government a year from now, the proposed amendments should stand.
But they introduce confusion over which changes are due on 1 July 2021 and which are due on 1 July 2022. This article describes the new rules and clarifies those coming in less than two months.
Briefly on the Budget numbers:
- Real GDP is forecast at 1.25% for 2020/21, rising to a healthy 4.25% in 2021/22. However, this is not sustained with a fall to 2.5% and 2.25% in the following financial years.
- Budget deficits continue over the forward estimates, from $161 billion this year to $80 billion in 2023/2024. Not much fiscal repair there. Net debt reaches $920 billion over the four years.
- There is little expected on CPI and wage growth, at 1.75% and 1.5% for 2021/2022 pushing up to 2.5% for both in 2023/2024.
Read the full budget changes, explained by Morningstar… here.