The recent budget was a game changer with, at last, a surplus, money in the pocket for most people and no new taxes.
But given the current lukewarm economic conditions, with property prices tumbling, many families suffering mortgage stress, and consumers sitting on their wallets, a fiscal stimulus is just what we need, and we have got it in spades.
There was a plethora of tax cuts, but they are so complex and have been promised, in some cases, so far in the future, that it is extremely difficult for anyone to get their head around them.
For example, from July 1, 2024 a reduction in the 32.5 per cent marginal rate to 30 per cent is promised. That's five years away!
Meanwhile, the non-refundable Low and Middle Income Tax Offset (LMITO) will be increased from $530 to $1080 per annum, while the base amount increases from $200 to $255 per annum. This is scheduled to happen progressively over the next four financial years.
Working that out would be a challenging question in an advanced mathematics paper.
Thankfully, there were few changes to superannuation, which puts the Coalition way at odds with Labor.
If Labor does get elected, they have promised a mini-Budget before the end of the calendar year - one including huge changes to superannuation, if they persevere with the policies they have announced to date. These include an end to the refund of excess franking credits, a reduction in the non-concessional cap from $100,000 to $75,000 and a reduction in the threshold where the 30 per cent contribution tax cuts in, to $200,000.
Labor has also promised to remove two policies introduced by the Coalition that are specifically targeted towards women. These are the ability to claim a tax deduction for personal contributions even if an employer is contributing for you and catch-up contributions - which are designed to allow women who have been absent from the workforce to make up for lost time.
The major change to superannuation in the budget was an extension of the work test from 65 to the new pensionable age of 67. This will enable more unemployed people to top up their superannuation if they think that is appropriate for them.
For years, the Coalition has been trying to abolish the work test and let everybody contribute to superannuation until age 75. But for some reason - it has never been explained - both Labor and the Greens have always opposed it.
Aged care is a more challenging issue each year and on budget day the Parliamentary Budget Office released predictions that government revenue may fall by around $20 billion within the next 10 years, due to fewer working-age people, and therefore less tax.
They also forecast that spending on aged care will rise by $16 billion over the same period.
The potential impact is frightening, particularly when you look at the scale of the measures that were proposed in the budget. For starters, the budget proposes additional funding for residential aged care by adding 13,500 residential care places.
While this may give us some warm feelings, the fact is that aged care places are running at just 90 per cent occupancy right now. Nothing to see here.
The elephant in the room is homecare. Yes, in recognition of the fact that most older people would rather age at home, the government has promised to provide funding over five years for the release of an additional 10,000 home packages. That's just 2000 per year.
Right now, there are nearly 128,000 people on the waiting list for home funding and the queue is growing by around 1000 people a week. What is proposed is not even a drop in the bucket.
- Noel Whittaker is the author of Making Money Made Simple and numerous other books on personal finance. firstname.lastname@example.org