Special Pherrus Federal Budget 2018-19 Review
The federal budget has been outlined for 2018-19.

This year’s Budget highlights a mix of some 37 measures. What are the need to knows?

Here are the Big Ones

–       Personal Income Tax Relief – there will be an immediate offset for low to middle income earners. Further relief is planned over 7 years

–       The company tax rate is still pegged to be reduced to 25% by 2020.

–       No Medicare Levy increase, it will stay at its current 2%.

–       Infrastructure spending will be huge at a whopping $24 Billion

–       Expect Superannuation changes. These Which will impact, Self Managed Superfunds, Fees, Inactive accounts and Insurance. Although no major news on this yet

–       The Black Economy will be targeted. The Government is going to funnel a lot of their investment into building up the ATO.

–       Small business $20,000 write off for Assets extended to 30 June 2019

–       From 1st of July 2019, the government will allow the ATO to impose a tax on Family Trust distributions at a rate equal to the top personal tax rate.

–       Small Business CGT Concessions will have an integrity measure in place, especially for businesses with annual turnover less than $2Million.

What will the Personal Income Tax Adjustments look like?

CURRENT PROJECTED
Rate % of taxpayers in this bracket Rate % of taxpayers in this bracket
$0 – $18,200 Nil 22% $0 – $18,200 Nil 21%
$18,201 – $37,000 19% $18,201 – $41,000 19%
$37,001 – $87,000 32.5% 53% $41,001 – $200,000 32.5% 73%
$87,001 – $180,000 37% 20% $200,000 + 45% 6%
$180,000 + 45% 5%

The ATO Will Be Backed With A Solid Investment

A strong theme in the narrative accompanying the 37 Treasury revenue measures is the additional funding being allocated to the ATO and related organisations. The Government seems to be determined to properly resource the ATO and related organisations.

This is evident from a number of measures including:

  •       Personal income tax measures to ensure individuals meet their tax obligations ($130.8 million);
  •       Delivering on debt collections and improvement in timeliness of debt collections ($133.7 million);
  •       Enhancing ATO enforcement against the Black Economy ($318.5 million);
  •       R&D measure providing additional funding to the ATO and the Department of Industry, Innovation and Science (amount not specified);
  •       Assorted other measures relating to aspects of superannuation and payroll and superannuation fund reporting.

Overall, the measure seeking to ensure individuals meet their tax obligations alone is estimated to raise some $1.1 billion over the forward estimates.

If you would like to discuss any of the above budget projected changes, contact your Pherrus Team member today.

 

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