The Coalition will move to re-energise support among baby boomer voters in tonight’s budget with a multi-billion dollar package aimed at improving retirement lifestyles and people’s ability to continue working late in life.
Younger voters will also get some sweeteners with some measures that will make it easier to consolidate retirement savings accounts. They’ll also see the benefits of the tax cuts being extended to low and middle-income earners, which ABC reports will be worth around $40 a month for those qualifying for the greatest amount of tax relief.
The measures are more evidence the Turnbull government is pushing hard to re-engage disillusioned voters ahead of an election, which is expected in about a year’s time but could be called earlier.
The Coalition recently also announced a half-billion dollar suite of measures to support protection and tourism around the Great Barrier Reef in Queensland, where it is vital for the Coalition to shore up electoral support if it is to retain power.
Treasurer Scott Morrison will expand the currently little-used Pension Loans Scheme, according to a report in The Australian Financial Review, so that retirees can borrow 150% of the age pension against the value of property they own. Payments under the scheme are tax-free and paid fortnightly, and could be used to spend more on aged care facilities.
Another measure supporting retirees will be an increase in the amount of money they can earn without affecting their pension payments. It’s currently capped at $6500 a year, but this will be lifted in the budget, allowing older people to improve their incomes in a measure designed to support a population that is ageing but more healthy and living longer.
The budget will also reportedly increase the number of home care places provided by the federal government by 20,000, according to a report in The Australian.
Despite the spending measures, there is increasing speculation that the windfalls from higher company tax receipts and income tax revenue through stronger-than-expected job creation will allow the Turnbull government to return the budget to surplus a year earlier than previously expected.
The measures supporting older voters are clearly aimed at capitalising on Labor’s plans to recoup over $5 billion through the elimination of refunds for franking credits, which has had retirees worried about the impact on their retirement incomes.
The tax cuts are expected to be delivered through a change in the low-income tax offset, or LITO, which currently only extends to people earning around $67,000 a year or less. The budget is expected to lift this to around $90,000. This contains the cost of the measure favourably compared to reductions in marginal tax rates in various brackets, which apply across the spectrum of incomes.
However, the budget is expected to outline a multi-year plan for income tax reduction across the taxpayer base.
There’s more at The AFR.
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