Budget delivers tax cuts | ATO's 3 key focus areas | Mortgage activity up 11.4%

Welcome to our mid-year finance update! As we cross into the second half of the year, it’s the perfect time to reflect on our financial journeys and plan for the months ahead.

With the federal Budget just behind us and the end of the financial year only weeks away, lots is going on. Below is the article titled "Budget delivers tax cuts."

Additionally, in our complete, unedited newsletter, you will find the following articles:

• ATO's 3 key focus areas
• Mortgage activity up 11.4%
• Fixed loans at low ebb

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Treasurer Jim Chalmers unveiled a series of measures in this year's federal Budget to address what he said was the government's “number one priority” – cost-of-living relief.

The centrepiece was the Stage 3 tax cuts. This included a tax cut for all taxpayers, with an average cut of $1,888 a year or $36 a week, starting from 1 July 2024.

Investment opportunity alert

My go to guy on Exchange Traded Funds (ETFs), Andrew Bonnici, a Financial Planner (he now wants to be known as the ETF Guy!), did a webinar with me a few weeks back, showing how you can use this tax cut to fund the interest cost on a $50,000 loan secured by your home and end up with an ETF share portfolio which, if historical long term averages (the last 15 years) are replicated, will result in a $182,000 investment asset in 15 years - all funded by your Stage 3 Tax Cuts.

Whilst I can help you with the loan, I am not the ETF expert. I leave that for folk like Andrew who live and breathe this stuff.

The Budget also awarded all households a $300 electricity credit, which will be applied in quarterly instalments, starting from 1 July 2024.

The Budget also included provisions for more affordable medications. Now, there's a one-year halt on the maximum Pharmaceutical Benefits Scheme patient co-payment for all Medicare cardholders and a five-year halt for pensioners and other concession cardholders.

In a move to aid students, the government has set a cap on the HELP indexation rate, tying it to the lower of either the consumer price index or wage price index. This measure, effective from 1 June 2023, reduces the 2023 indexation rate from 7.1% to 3.2%. Consequently, a student carrying an average HELP debt of $26,500 will see approximately $1,200 erased from their outstanding loans.

Instant asset $20,000 write-off to continue

There was a bit of talk about the extension of the instant asset write-off for businesses with turnover of less than $10 Million and the Libs wanted to increase it to $30,000. As at the time of writing, this is still up for negotiation. The good news is you can still claim the instant asset write-off for the current tax year which ends on 30 June 2024 - but as always, get good advice from your tax accountant!

"Success is not final, failure is not fatal: it is the courage to continue that counts." - Winston Churchill.