The Budget for 2017/18 highlights changes in superannuation, a new first homeowners savings plan, Medicare levy increase, and bank levies.

One of the big announcements of this budget was in relation to superannuation, and announced that people over 65 downsizing their home will be able to put up to three hundred thousand dollars per person into superannuation.

At this stage, all we have is the budget night announcement, we don't have any details and we don't have final legislation. However it does look encouraging for people who are looking to downsize in retirement, that they will be able to top up their superannuation. The budget night announcement does indicate that this will be available even if you have exceeded the 1.6 million dollar limit on superannuation, so potentially some good news there, we will have to wait and see.

There was a lot of noise made about the first homeowners savings plan that has been announced in the budget, this allows people to put an extra up to $30,000 into superannuation to save towards a house. Then subsequently remove that, plus the earnings, to use as a house deposit. This means that a couple could potentially withdraw $60,000 plus the earnings to use as a deposit for a home. That's good news on the surface, it is possible that people will find that this is unlikely to actually be implemented, as the tax on the way in, and the tax on the way out, gives it only a modest advantage in terms of saving increases. While it significantly increases the complexity, and we think for many people it simply won't be a solution.

The other big announcement was about the Medicare levy, which is up half a percent. Whilst that's not good news for anybody in terms of Taxation, it certainly reinforces the health system and it is a very good quality health system here in Australia.

The final big announcement of the budget night was regarding the banks, which will be levied 0.6% of their liabilities. That might seem like a fairly small number, until the math is done, it is expected that this will produce about one and a half billion dollars of extra revenue to the government each year. It is our expectation, that this levy will be passed on to borrowers, or will cause reduced return on bank shares, or a combination of the two.

There is an expectation that borrowing costs for Australian's will go up, which will put further pressure on property prices. We think this might add to the pressure of rising interest rates and supply of housing, potentially adding some downward pressure on Bank prices.

Overall this year the budget hasn't had any giant surprises in it, a couple of things that will be handy, but obviously an increased tax by way of the Medicare levy and the levy on the banks.

The team at Tupicoffs are always available if you have any concerns.

Highlights

• Downsizing homeowners can potentially benefit from topping up superannuation, even if they exceed the 1.6 million dollar limit, offering a positive outlook for retirement planning.

• The first homeowners savings plan, while initially appealing, may not provide significant advantages due to tax implications, leading to potential complexities for users.

• The increase in the Medicare levy aims to support the healthcare system in Australia, reinforcing the importance of quality healthcare services for the population.

• Bank levies, although seemingly small at 0.6%, are expected to generate substantial revenue for the government, potentially impacting borrowing costs for Australians and putting pressure on property prices.