Meg's Musings – Federal Budget 2021-22: An overview

12 May 2021

Meg Heffron

Managing Director

My 2020 Budget wishlist had three items: deal with residency, legacy pensions and the unnecessary complexity in the indexation of transfer balance caps. I’m giving this Budget a tentative 2 out of 3 – which ain’t bad at all.

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I say “tentative” because there are definitely important details that will only emerge when the legislation is drafted but there were at least some highly positive steps in the right direction.

We’ve explored the two that made the cut in our blogs – residency and legacy pensions – and highlighted where we think the legislation needs to avoid ambiguity and could in fact go further than the announcement suggests.

My May 2021 wishlist included an extra three things – one of which was to stop talking and just get on with passing the new legislation to extend the bring forward rules up until age 67. Instead, the Government has announced a raft of contribution changes that make this somewhat redundant (see our blog here).

Of course there are always things we would have liked to have seen (or were glad we didn’t) and we’ve recapped some of those here. The only male member of our technical team has also bravely taken a look at whether the superannuation measures (as opposed to the budget as a whole) do much for women – see his cake baking insights here.

All in all when it comes to superannuation, I would describe this budget as “true to label”. It’s not a major change creating enormous opportunity for (particularly) wealthier Australians like May 2006, nor is it a “quick, slam the lid back on tightly and control those tax concessions” budget like May 2016. It’s some simplification and some modest measures to help older Australians extract value from a system that didn’t exist in its current form for a lot of their working lives.

By my reckoning, that makes it about right for the times we’re in.

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