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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 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.

Budget 2019-20 Highlights:

• Personal tax cuts – $19.5bn package of personal income tax cuts
• Small business – Instant asset write-off increased to $30k and expanded to businesses under $50m
• Infrastructure – $100bn in infrastructure projects across all States and Territories
• Regulators – $1bn ATO task force funding targeting multi-nationals and high net worth individuals

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.

If we can assist with any additional information, please contact us.

• Individuals

  • Personal income tax cuts
    • Low and middle income tax offset increased
    • Low income tax offset 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
  • 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

• The economy

  • Where the money comes from
  • Return to surplus
  • Growth in trading partners uncertain
  • Domestic growth solid but tempered

This article is for use of a general nature only and is not intended to be relied upon as, nor be substitute for, specific professional advice. No responsibility for loss occasioned to any persons or organisations acting on or refraining from action as a result of any information or material on our website will be accepted. Please ensure you contact us to discuss your particular circumstances and how the information provided applies to your situation.