Wish the Budget papers were in dot points? Well, here it is:
PERSONAL TAX
- Low and Middle Income Tax Offset (LMITO)
What is proposed?
- The LMITO will be increased from a maximum amount of $530 to $1080 pa for taxpayers earning up to $126,000 and the base amount will increase from $200 to $255. Families on a dual income will receive the tax offset of $2,160.
- Proposed changes:
| Taxable Income (TI) | LMITO |
| $0 – $37,000 | $255 |
| $37,001 – $48,000 | $255 + ([TI – $37,000] × 7.5%) |
| $48,001 – $90,000 | $1,080 |
| $90,001 – $125,999 | $1,080 – ([TI – $90,000] × 3%) |
| $126,000 | Nil |
Timing?
- If passed, this measure will cover the current financial year up to 30 June 2022.
- Low Income Tax Offset
What is proposed?
- From 1 July 2022, it is proposed to increase the low income tax offset (LITO) from $645 to $700.
- Proposed to apply to people with taxable incomes between $37,500 and $45,000.
Timing?
- If passed, this measure will be effective from 1 July 2022.
- Reduced Tax Rates
What is proposed?
- From 1 July 2024 (2 elections away), there will only be three personal income tax rates with an increase in the tax rate thresholds each year until that time.
- From 1 July 2024, it is proposed people with a taxable income between $45,000 and $200,000 will be subject to a marginal tax rate of 30%.
- Proposed changes (including previously announced changes):
| Tax Rate | Threshold 2017-18 | Threshold 2018-19 to 2021-22 | Threshold 2022-23 | New rates and threshold from 2024-25 |
| Nil | $0 -$18,200 | $0 -$18,200 | $0 -$18,200 | $0 -$18,200 |
| 19% | $18,201-$37,000 | $18,201-$37,000 | $18,201-$45,000 | $18,201-$45,000 |
| 30% | N/A | N/A | N/A | 45,001-$200,000 |
| 32.5% | $37,001-$87,000 | $37,001-$90,000 | $45,001-$120,000 | N/A |
| 37% | $87,001-$180,000 | $90,001-$180,000 | $120,001 -$180,00 | N/A |
| 45% | $180,000 + | $180,000 + | $180,001 + | $200,001 + |
- Medicare levy low-income thresholds
What is proposed?
- The threshold for payment of the Medicare levy is proposed to be increased as follows:
| 2017-2018 thresholds | Proposed 2018-19 thresholds | |
| Singles | $21,980 | $22,398 |
| Couples, no children | $37,089 | $37,794 |
| Each dependent child or student | $3,406 | $3,471 |
| Seniors/pensioner singles | $34,758 | $35,418 |
| Family threshold seniors/pensioners | $48,385 | $49,304 |
Timing?
- If passed, this measure will be effective for the 2018-19 financial year (current financial year).
- Energy Payment for Pensioners
What is proposed?
- It is proposed that $75 for singles pensioners and $125 for pensioner couples will be provided as a one-off energy assistance payment to assist with their energy bills.
Timing?
- If passed, this measure will be effective immediately.
BUSINESS
- Instant Asset Write-Off
What is proposed?
- It is proposed that the instant asset write-off is increased to $30,000 and made available to businesses with an aggregated turnover of less than $50 million (currently only available to businesses with an aggregated turnover of less than $10 million).
Timing?
- If passed:
- For small businesses (aggregated turnover of less than $10 million), this measure only applies to assets that are first used or installed ready for use from 7.30pm (AEDT), 2 April 2019.
- For medium business (aggregated turnover of less than $50 million but more than $10 million), this measure only applies to assets purchased from 7.30pm (AEDT), 2 April 2019.
- This measure will expire on 30 June 2020.
- EMDG scheme
What is proposed?
- Additional $60 million in the export market development grants (EDMG) scheme over the next 3 years.
- The EDMG scheme reimburses up to 50% of eligible export promotion expenses above $5,000 and less than $15,000, for eligible businesses. For more information visit the Austrade Website at https://www.austrade.gov.au/.
- SUPERANNUATION
What is proposed?
- From 1 July 2020, individuals aged 65-66 years will be able to make voluntary contributions to super without needing to meet the contributions work test. Currently, individuals aged 65-74 must work at least 40 hours in any 30 day period in the financial year in which contributions are made (work test).
- The age limit for making spousal contributions is currently limited to aged 69 and under. This is proposed to be increase from 69 to 74 from 1 July 2020.
- From 1 October 2019, insurance in superannuation funds must be an ‘opt-in’ approach for accounts with balances of less than $6,000 or new accounts belonging to members under the age of 25 years. This was previously announced by the start date has now been delayed.
Timing?
- If passed, the measures relating to the work test and the spousal contributions will come into effect from 1 July 2020. The measure relating to the opt-in rule for insurance will come into effect from 1 October 2019.
- EMPLOYMENT
What is proposed?
- A new $525 million skills package is proposed to create 80,000 new apprenticeships over 5 years. It is proposed to double incentive payments to employers to $8,000 per placement (being $2,000 after 12 months and $2,000 at completion in addition to the existing employer incentives of $1,500 at commencement and $2,500 at completion of an apprenticeship).
- Eligible occupations may include carpenters and joiners, plumbers, hairdressers, air-conditioning and refrigeration, mechanics, bricklayers and stonemasons, plasterers, bakers and pastry cooks.
- $9.2 million over 4 years is to be provided to the Fair Work Ombudsman to address sham contracting behaviour.
- Funding has been allocated to establish a national labour hire registration scheme in the industries of horticulture, cleaning, meat processing and security.
- INFRASTRUCTURE
What is proposed?
There were many infrastructure projects announced as part of this year’s Budget but here are some of the SA specific projects:
- Adelaide City Deal: $135 million for Lot 14 (old RAH site) with $85 million for an Aboriginal Art and Cultures Gallery, $30 million for an International Centre for Tourism, Hospitality and Food Studies and $20 million for a collaborative research engagement hub.
- Space Discovery Centre – $6 million to provide education and mission simulation to support training.
- Tourism – $14 million to promote Adelaide to locals and visitors by upgrading the Cedars and Carrick Hill historic houses.
- Roads -$114.4 million for the safety package, $73.6 million for the Victor Harbor Road duplication – Main South Road to McLaren Vale, $44 million for the Horrocks Highway, $7 million for the Thomas Food facility supporting roadworks, $6.4 million for the Naracoorte roundabouts, $4.8 for the Koremers Crossing roundabout, $115.5 million for the Torrens Road (Ovingham) Level Crossing. Full details of all infrastructure projects can be found in Budget Paper No. 2 (from page 123): https://www.budget.gov.au/2019-20/content/bp2/download/bp2.pdf.
- COMPLIANCE
What is proposed?
- Any changes to Division 7A have been deferred to 1 July 2020 to allow for further consultation.
- $1 billion is proposed to be given to the ATO over 4 years to extend the Tax Avoidance Task Force.
- $42.1 million is proposed to be given to the ATO over 4 years to increase activities to recover unpaid tax and superannuation liabilities. These activities will focus on larger business and high wealth individuals.
- It is proposed that the ABN System be amended to impose new compliance measures that require ABN holders to:
- from 1 July 2021, lodge their income tax return; and
- from 1 July 2022, confirm the accuracy of their details on the Australian Business Register, annually.
SUMMARY
So close to an election it is anyone’s guess whether any of the Budget is likely to be passed. Some of the measures are likely to be supported by a Labor government so we will have to ‘wait and see’ what comes from these proposals.