Australia Federal Budget 2018-19 highlights
Brisbane accountants Hanrick Curran provide a summary of the key Australian Budget measures for businesses & individuals
On 8th May 2018, Australia's Federal Treasurer Scott Morrison handed down the 2018-2019 Federal Budget. Jamie Towers, tax partner at Hanrick Curran, provides a summary of the key points for businesses, individuals, as well as the key changes proposed for superannuation.
In general, Australia's Budget deficit is expected to be AUS$14.5 Billion for the 2018/19 year, returning to a small surplus of AUS$2.2 Billion in 2019/20, a year ahead of the previous forecast.
Jamie adds: "As widely anticipated in an election year, the Treasurer has found room for individual tax cuts, increasing over time. Furthermore, Australians will be able to breathe easy with various 'superannuation friendly' measures announced in what many are calling The Baby Boomer Budget."
- A further extension of the AUS$20k asset write off for another 12 months to June 2019
- Tax deductions for employee and contractor payments to be denied if PAYG requirements are not met
- No cash payments to be made over AUS$10,000
- no deductions on loan interest to purchase vacant land
- Director Penalty Regime extended to GST, luxury car tax and wine equalisation tax
- New tax offset to be introduced for low and middle income earners
- Removal of the 37% tax bracket over time
- Proposed medicare increase will not go ahead
- High profile individuals will be taxed at a personal rate where the income relates to their ‘image’
- No CGT discount for assignment of Partnership interests
- Minors taxed as adults on income from testamentary trusts
A mixture of Labor policy announcements and Royal Commission revelations have recently seen Self Managed Superannuation Funds (SMSFs) take a public battering, but there are positive proposed measures which will hopefully win back some much needed confidence. The key changes proposed for superannuation and SMSFs in the Budget are:
- Expanding the SMSF member limit from 4 to 6 members
- Three year audit cycle for complying SMSFs
- A 12 month exemption from the work test for low super balance 65-74 year olds to boost retirement savings
- Life insurance to be opt in for those who are under 25 years old or have a superannuation balance of <$6,000
- Exit fee ban on all superannuation funds
- High income earners may switch surplus superannuation guarantee contributions to personal income
- A variety of low balance superannuation measures will also be introduced.
For advice on how these tax changes could affect you
Contact Jamie Towers, tax partner at Hanrick Curran.