The Treasurer Josh Frydenberg’s first budget has lots of goodies with few “baddies”. See below for links to:
- Top 5 points for tax agents
- Winners and losers infographic.
This was to be expected with the next federal election only weeks away and the Coalition Government trying to make up ground in the polls.
The Treasurer’s “wow” factor was a return to a budget surplus of $7.1 billion for the 2019-20 fiscal year.
The main election mantra of this budget is “without increasing taxes”. Without increasing taxes, the Coalition Government, if re-elected, promises to deliver on a mix of benefits for a majority of taxpayers in Australia. These include:
- Personal income tax cuts through adjusting upwards the thresholds at which the current tax rates apply (from 1 July 2022 to 30 June 2024) and then, finally, in the income year ending 30 June 2025, having only three rates of tax, with the highest marginal rate (45%) commencing at $200,000.
- Increasing the Low and middle income tax offset to a maximum offset of $1,080 for the years ending 30 June 2019, 2020, 2021 and 2022.
- Increasing the instant asset write-off threshold from $25,000 to $30,000 and extending this so that businesses with a turnover of between $50 million and $ 10 million can also access the concession. This will apply from Budget night until 30 June 2020.
Apart from the above, the budget was quite “light” on tax and superannuation changes. The government, no doubt, is trying to make itself a small target in relation to the coming election.
Tax agents will be interested to know that the proposed changes to Division 7A will be deferred from 1 July 2019 to 1 July 2020, and that there are some useful changes to superannuation that will benefit older clients.
Tax & Super Australia continues to lament the lack of action on a number of issues that are important to tax agents. This includes the application of the main residence exemption to non-residents and the superannuation guarantee amnesty.
The basic message from the government in this budget is that it fixed Labor’s debt and deficit issues and has righted the good ship Australia back onto a solid economic course. Whether the electorate is convinced will only be known after the election.
Tax & Super Australia