Leading accounting firm BDO consistently produces the best federal Budget summary, and this year’s did not let them down. The sub-title of the 2017 Federal Budget summary is:
A quick sprint to the finish line for housing affordability, but still an endurance race for real tax reform.
This nicely reflects the key theme of the budget, housing affordability, and that the prospects for major changes to the tax system in the interests of efficiency and simplicity have been deferred indefinitely.
Led by BDO tax partner Mark Molesworth, the BDO team have provided insightful analysis of the major Budget measures and have discovered some interesting implementation issues and have raised some doubts about the effectiveness of the government’s measures to promote affordable housing investments. One of BDO’s best insights relates to the removal of tax deductions for property investors regarding depreciation on already installed fixtures and for travel expenses:
“The Government has been true to its word and not removed negative gearing. However, it has curtailed some of the large discretionary expenditure deductions which can add to negative gearing losses.”
BDO followed up its Budget summary with its usual Thursday morning breakfast at the Brisbane Convention and Exhibition Centre, hosted by the ABC’s Chris O’Brien, who would no doubt find opportunities on the comedy circuit if he were ever a victim of budget cuts. Mark Molesworth gave an insightful and entertaining address, the highlights of which were:
- pointing out that a young person could be disadvantaged if they make voluntary super contributions with a view to eventually purchasing a house, but then fall in love and live with a partner who already owns a house;
- observing correctly that the Budget out-year projections are no more than “institutional guesswork”; and
- my favourite observation of all, that the bank levy would effectively be the big banks’ “application fee for readmission to the human race”.
My own view is that the banks should consider themselves very lucky they have avoided a Royal Commission so far, as well as possibly harsher measures, and would be wise not to fight the Government on the levy.
Another excellent Budget summary from BDO
Also worth reading is Morgans’ Chief Economist Michael Knox’s take on the Budget:
Michael’s view that it was a thoughtful budget is consistent with BDO’s view that it was a budget built around clear themes. Mark Molesworth noted this meant his team had a 2am finish this year, rather than a 5am finish.
Finally, readers in small business may be interested in the recording of Suncorp’s live stream of its Budget commentary:
This was recorded at the Joinery on Montague Rd, West End, which is a terrific venue for live recordings and a wide range of functions. Small business expert Nick Behrens and I were there behind-the-scenes undertaking related work.
The Suncorp Small Business Connect set at the Joinery, West End, Brisbane
Now, with the federal Budget delivered, we await the Queensland Budget on 13 June. Given the upcoming election, I expect a State Budget handing out lots of sweets to the voters!