The recent budget announcement has got people talking. As with most Government announcements there are always polarised opinions with regards to the issues that have, or have not, been addressed.

With the latest announcement it would seem that the Rudd government has responded to the global financial crisis by restructuring the budget to focus new stimulus spending around infrastructure construction, job protection and pensions funded by cuts to middle-class welfare. Many of these spending cuts however will not be fully impacted until the economy begins to recover.

Below we have summarised some of the most important changes in the 2009 Budget that may affect you.

Economy The government predicts that the unemployment rate will peak to 8.5% in 2011. In response to this statistic and in an attempt to lessen the impact of such an outcome they have allocated almost $1.5 Billion over four years to retrain young and retrenched workers. Other winners from this budget include businesses that provide consulting services and products to the environment, building, infrastructure, defence and superannuation industries. The big spending programs, including $8.5 billion in land-transport networks, $3.5 billion in clean-energy programs and $5.7 billion for higher education and innovation, an extension of the first-home-owners’ scheme, paid parental leave and increased pensions, aim to retain 210,000 jobs and ensure Australia out performs other economies. This budget is intended to be the "nation-building" budget.

Business For small businesses the initially proposed 30% tax rebate on eligible capital assets will be increased to 50% for small businesses installing capital infrastructure before December 2010. New funding for research, research infrastructure and business innovation is also an important helping-hand for businesses. The government is also allowing $10 million for businesses seeking to improve their e-commerce facilities. The much anticipated paid maternity leave scheme comes into effect from January 2011, but unless private business contributes to the payment, it will have minimal effect with projected budget costs of $730 million over four years.

Superannuation From 1 July 2009, the limit on salary-sacrificed and employer-paid superannuation will be set at $25,000 a year, which is half the current limit. For people over 50, the cap will also be halved to $50,000, and from 2012-2013 people over 50 will also be included in the lower $25,000 cap. It can bee seen that this is perhaps one of the Government’s attempts to generate some revenue as by capping the contribution limits employees and other super fund contributors will now have to find alternative means for storing or investing their money. It is more than likely these other forms will be taxed at a higher rate than the super funds and hence this creates extra revenue for the Government.

In addition, the government’s contribution to the superannuation co-contribution scheme will be temporarily reduced for three years. This will give the government a saving of almost $1.4 Billion over the next four years.

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