How your wallet could be impacted by the Coalition win

How your wallet could be impacted by the Coalition win

Here’s a great breakdown of some of the Coalition promises and how they may affect you.

First Home Buyers

First home buyers have been promised some assistance under a Coalition government.  It has indicated it will assist a small group of FHBs and enable them to buy their home with a deposit of only five per cent without having to take out Lenders’ Mortgage Insurance.  The First Home Loan Deposit Scheme will be available through private lenders and small lenders, which Mr Morrison said is a bid to ensure competition on price for Australian borrowers.  But the details aren’t clear and they still will be required to meet the bank’s strict lending criteria and does create potential risks around lending to households with a smaller deposit.


The Coalition’s signature election policy will deliver phased in tax cuts providing a tax breaks for more than 10 million Australians and simplify the system by removing the 37 per cent tax bracket entirely.  Income Tax:  Liberal’s plan is to cut personal income taxes for all individuals earning up to $126,000 each year would be worth up to $1,080 for individuals or $2,160 per year for dual-income households per year.

Looking further ahead, the Liberals also intend to make additional changes to personal taxes to come into effect in 2024-25 which could see all taxpayers on salaries of $45,000-$200,000 pay tax at the lower rate of 30 per cent.

The most immediate benefit of the Coalition’s tax policy will come from July 1 this year.  Australians earning less than $37,000 will get a gift of up to $255 with their tax returns.  If you’re earning between $48,000 and $90,000, you will get $1080. The offset then scales down to nothing for anyone earning $126,000 or more.

If you’re worried about your superannuation

Australians aged 65 and 66 will be allowed to make voluntary superannuation contributions without meeting the work test.  The Coalition is also going to allow 65 and 66 year olds use the bring-forward rule of making three years’ worth of non-concessional contributions of up to $300,000 in a year.  And if you’re upwards of 74 years old, you can receive spouse contributions.

Small business owners

Morrison promises to cut taxes to 27.5 per cent for small businesses earning less than $50 million, with a view to cut that further to 25 per cent.  But for unincorporated businesses with a turnover of less than $5 million, they’ll increase the eight per cent tax discount ($1,000) to 16 per cent.

The Liberals have also promised to increase and extend the instant asset write-off, help cash flow, give better access to finance and change competition laws.

As part of the 2019 budget, businesses turning more than $50 million can write-off assets against their taxable income.

Previously, businesses turning over more than $10 million were excluded from the scheme. The Coalition has also increased the threshold from $20,000 to $25,000.

If you own shares

You’ll get to keep your excess franking credit cash refund.  This will please many self funded retirees

If you care about climate change

The Coalition has committed Australia to reduce its emissions by 26 per cent on 2005 levels by 2030, in line with the Paris targets.

The Morrison government is committing $2 billion to a Climate Solutions Fund: it’ll build Snowy 2.0; it’ll build a second undersea power interconnector to funnel hydroelectric power generated in Tasmania to the mainland; and $22 million for community-led environmental projects.

The Coalition’s central emissions reduction policy and will cost $3.5 billion over 15 years.  Measures include a climate solutions fund – an extension of the existing emissions reduction fund.  The scheme pays farmers and others to reduce carbon dioxide emissions. through activities such as improving energy efficiency or increasing native vegetation.

If you’re a parent

The budget pledged $453 million to fund four-year-old kindergarten for another year and ensure children have access to 15 hours a week of preschool in the year before school.

The Coalition has promised a $36 million package to tackle pre- and post-natal depression, and women who have hit pause on their career will get a $75 million ‘Mid-Career Checkpoint’ initiative.
Another $328 million has been pledged to combat domestic violence.

The Coalition has promised a $4.6 billion package for Catholic and Independent schools, which comes on top of $23.5 billion over 10 years for all schools as part of Gonski 2.0, signed up to by former prime minister Malcolm Turnbull.

The government has promised to fund up to 80,000 apprenticeships as part of a $525 million package. The budget also contained a $94 million scholarship program to get students to study in regional areas. In 2017, the Coalition introduced a two-year cap on university funding.

How we’ll treat migrants and refugees

We’ll welcome 30,000 less migrants a year and won’t be taking any more refugees than we already are.

Source:  Update Provided by Michael Yardney


Election Result Reduces Tail Risks

  • A coalition win can be deemed a “surprise” for investors and the upshot is that many tail risks that were potential consequences from what was a significant and wide reaching tax and policy reform agenda from the ALP are now removed.

Shape Still Forming

  • Whilst it is clear that the ALP will not be able to form Government it remains to be seen what sort of lower house majority can be garnered from the remaining 5 seats yet to be called
  • There is still some possibility of a minority government needing to be negotiated

Tactical Rotation for Some Sectors

  • We would expect a meaningful rotation back towards Blue Chip Yield given imputation refund ability is no longer at risk
  • For Banks, some of the risks that may have arisen from Negative Gearing changes are diminished
  • Domestic Healthcare/ Insurance and Consumer stocks should all see a sentiment boost to outlook

Watching for earlier Stimulus

  • With a base level tax stimulus already legislated, focus will be on ability to pass revised tax pledges from the 2019 budget
  • The bulk of this package is slated for 2023. Should it be brought forward in response to the slowing economy – this would mark significant upside to current base case expectations

RBA Signals

  • Market pricing continues to firm for a June rate cut
  • Whilst we agree that the June meeting is live, we still hold the view that the bar for a rate move outside of an SMP cycle (Feb/May/Aug/Nov) is high, and there is enough that the RBA can point to (jobs growth, record levels of participation and employment -to -population etc) that make August the most likely timing for an initial rate cut

Animal Spirits Now Key

  • A return of policy status quo is likely to calm anxiety that clearly presented in impacted sectors from the ALP proposed reforms
  • The reality of a slowing economy and lagged stimulus response to date keeps the door open to both further macro disappointment and ASX 200 earnings risk
  • Greater confidence and intentions are required to turn the cycle and encourage demand to pull activity forward
  • If these spirits stay hibernated, downside risk will remain elevated

Source:  Morgan Stanley


As always, if you have any questions, you can reach me via email at or call me on  0438 396478. I’m here to help.


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