The Federal Government announced its 2020-21 budget which, unsurprisingly, was dominated by big spending measures to address the impact of COVID-19 on the economy and getting people back into work. The Budget was "all about jobs" and getting the economy moving again. As a result, the Government expects a record budget deficit of around $210bn. We’ve included a quick summary of the major budget announcements later in this update.

On the super front, there were some major announcements, mainly designed to stop people having multiple accounts and save on fees. Here’s a recap of the new measures:

• From 1 July 2021, members will stay with their existing super fund when they change jobs if they don’t make a choice. If a person doesn’t have a super account and doesn’t choose one, the employer will pay the person’s super into the employer’s default fund.
• A new online comparison tool, called YourSuper, will be created by 1 July 2021. The tool will make it easier for people to compare super funds.
• From 1 July 2021, super funds (MySuper products) will be subject to a new ‘annual performance test’. Funds that fail two consecutive tests won’t be able to accept new members.

There were also several measures to increase the accountability and transparency of super funds including a new requirement for funds to act in the best financial interests of members and disclose how they’re spending members’ money.

Here’s more information on the measures.

The Budget didn’t contain any major changes to the way super is taxed or contribution caps, nor were there changes to the Government’s already announced COVID-19 early release of super measure which will finish on 31 December 2020.

While there’s been talk about changes to the already legislated increase in the employer super contribution rate from 9.5% to 12%, there was nothing announced in the Budget. 

Some of the key Budget measures include:

• the fast-tracking of personal tax cuts originally scheduled for 2022 to July this year;
• major job creation initiatives, including incentives for employers to employ young job seekers (called the JobMaker Hiring Credit) and a significant investment in training, skills and apprenticeships;
• tax breaks and incentives for businesses;
• significant spending on infrastructure, manufacturing and research; and
• two tax-free payments of $250 for age pensioners and others on government support.

Please note, none of these measures are yet law and still need to be legislated.

More information

For more information about the full range of budget announcements, see the Budget 2020-21 website.

As always, if you have any questions please call us on 13 64 63, Monday to Friday, 8am to 6pm, email help@mine.com.au or contact your financial adviser. We can also put you in touch with Mine Super Financial Advice to discuss your personal circumstances.