A vote for your hip pocket

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IT’S been criticised as one of the most boring election campaigns many can remember, but Saturday’s vote is going to have a big impact on finances.

Super fund members, investors and wage earners are facing major changes depending on which party wins.

So how do you decide what will be best for your hip pocket? And should you vote to make things better for yourself, or the future of the nation?

Finance experts say voters tend to adopt a whats-in-it-for-me approach, and each individual will be affected differently by party policies.

Financial strategist Theo Marinis believes voters should think of Australia first but the fact that we dont is the reason we have the politics we have.

Compare superannuation funds

On the finance front, Marinis prefers the Coalitions superannuation policies, Labors negative gearing and capital gains tax changes, and the Coalitions economic management.

Labor is big spending, but how are they going to pay for it down the track?

CMC Markets has been monitoring investor sentiment about the election and it has fallen heavily since May.

Chief market strategist Michael McCarthy says investors have been unhappy with pork-barrelling in marginal electorates. Rank political populism rarely plays well with investors, he says.

McCarthy says election sentiment started to improve last week, perhaps because of a growing perception that many voters have decided their vote and are no longer paying attention to this exceptionally long election campaign.

Whoever wins on Saturday, there is no need to make knee-jerk financial decisions, because any proposed laws are likely to have a long and windy path through what could be another tricky Senate.

McCarthy says the impact of new policies will depend on your personal situation.

Changes to superannuation and taxation affect investors directly. Any investors unsure about the impact of proposed changes in these areas should speak with their advisors,
he says.

WHAT TO EXPECT:

HEALTH

Labor: spend more on health (and education) probably by raising taxes.

Coalition: says extra funding for health needs to be spent wisely and has cut some of Labors previous funding promises.

WAGES

Coalition: to scrap 2 per cent Temporary Budget Repair Levy for income over $180,000.

Labor: to keep the levy, making top tax rate 49 per cent.

INVESTMENT

Labor: to scrap negative gearing for all but new properties from July 2017, and halve capital gains tax discounts on assets.

Coalition: has kept its hands off these taxes.

SAVINGS

Both parties plan to increase super contributions taxes for high-income earners and the Coalition plans to introduce a pile of new super changes including lower contribution caps, tougher limits on how much wealthy savers can hold and put into in super, and new incentives for low-income earners.

RETIREES

Labor: 15 per cent tax on retirees earnings above $75,000 a year from their super pension fund.

Coalition: $1.6 million limit on how much people can hold in a tax-free retirement pension.