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The Ballot Box Budget

by Knowledge Shop Editor, on 03/04/19 11:02

This is a Budget not only designed to showcase the return to surplus (and by default the Government’s economic credentials) but engage voters with initiatives designed to make them feel like they are more prosperous. A massive infrastructure spend adds to this sentiment.

The Government has also stated that it will keep taxes as a share of GDP within the 23.9% cap. 

All measures, of course, are reliant on the relevant legislation passing Parliament which is by no means a given with an election looming.

What is missing from the Budget is any word or statement on the previously announced measures that would deny non-residents access to the CGT main residence exemption. Shadow Treasurer Chris Bowen recently released a media release calling on the Government to drop the “unfair ex-pat CGT changes.” So, unless the Government returns from the election with a majority, these changes will not come to fruition.

Individuals

  • $19.5bn personal income tax cut package
  • Low and middle income tax offset (LMITO) increased
  • Low income tax offset (LITO) increased
  • One-off energy assistance payments
  • Medicare levy thresholds increased
  • Higher Education Loan Program cost recovery program delayed

Superannuation

  • Superannuation ‘work test’ watered down & age limit for spouse contributions increased
  • Permanent tax relief for merging super funds
  • Streamlining the calculation of ECPI
  • Opt-in insurance delay
  • Defence Force members can stay in super fund after discharge

Business           

  • Instant asset write-off increased to $30k and expanded to businesses under $50m
  • Division 7A changes postponed
  • Luxury car tax refunds increased for primary producers and tourism operators
  • North Queensland flood grants to be tax-free
  • Queensland storm payments to be tax-free
  • Increased funding for Export Market Development Scheme

Compliance

  • $1bn ATO ‘sugar hit’ to tackle large corporates and high net wealth individuals
  • Recovering unpaid tax and superannuation liabilities         
  • $607m to follow through on response to Banking Royal Commission           
  • ABN status stripped for non-compliance
  • Support for small business in tax disputes
  • Sham contracting unit established           
  • Registration scheme for Labour Hire operators

International agreements           

  • Australia-Israel Tax Treaty          
  • Australia Hong Kong Free Trade Agreement         
  • Indonesia Australia Comprehensive Economic Partnership Agreement        
  • More countries added to information exchange list           
  • More work and holiday visas for Indonesians        

Other   

  • $3.9bn Disaster response funding
  • Climate solutions package
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Topics:Budget 2019-20

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