Interest rate cuts will have more of an impact on retirees than anything contained in the federal budget, a south-west representative from a retiree group said.
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The Reserve Bank of Australia (RBA) lowered the cash rate to 1.75 per cent on the same day the budget was released, which will affect interest rates.
Rod Carter, a Port Fairy resident from the Australians in Retirement organisation, said the budget contained “nothing” for retirees aside from assistance for relatives such as children and grandchildren.
The government introduced some superannuation changes but said they would only affect four per cent of people with superannuation.
“Overall the changes to superannuation will affect very few retirees and so cause little angst,” Mr Carter said.
“The biggest problem for retirees was not the budget but the RBA’s decision to cut the interest rate to 1.75 per cent.
“Retirees can no longer rely on interest from term deposits with banks to fund their retirement and consequently have to take on more risk to improve returns.”
The changes to superannuation include a range of measures targeting those at the top end of the scale, including a $1.6 million transfer balance cap and a rise on the amount of tax paid by people making superannuation contributions over $250,000.
The government will also introduce a Low Income Superannuation Tax offset to replace a similar program that expires in the middle of next year.
The offset assists people with an adjustable taxable income of $37,000 or less.
Mr Carter said changes to company tax rates would be most likely to have a negative impact on retirees.
“Most retirees will have invested many dollars in companies who pay fully franked dividends on their shares,” he said.
“The company tax paid by these companies on the shares is returned to the retirees whose marginal tax rates are less than 30 per cent.
“Many will be at zero per cent because the shares will be held in superannuation funds.”
The Australians in Retirement group is branch of the Association for Independent Retirees, a non-profit organisation that represents more than 6000 members.