The Federal Government announced its Budget for 2017-18.
The pre-Budget announcement of needs-based school funding – together with big bets on infrastructure, the removal of the Medicare rebate freeze, a crackdown on non-residents investing in Australian real estate and a one year reprieve for the popular small business $20,000 instant asset write-off – will have broad appeal to voters.
PERSONAL TAXATION
- Personal tax rates – no change: 2% Budget deficit levy to end on 30 June 2017
- Medicare levy to be increased to 2.5% from 1 July 2019
- Medicare levy low-income thresholds for 2016-17
- Higher Education HELP changes announced: faster repayment and threshold changes
- Tax free payments to child sexual abuse survivors
- Changes to FTB Part A payments
- A standard tax deduction for work expenses? Not in this Budget
BUSINESS TAXATION MEASURES
- Major bank levy from 1 July 2017
- Company tax rate: Govt re-commits to remainder of 10-year package to further reduce rate
- CGT small business concessions: restricted to assets used in business
- Business to pay levy on certain skilled visas
- Using stapled structures to re-characterise trading income – comment period for consultation paper
TAX COMPLIANCE AND INTEGRITY
- MAAL to apply to broader range of entities
- Taxable payments reporting system extended to couriers and cleaners
- Extension of funding for black economy audits
- Prohibition on sales suppression software
- Extra funds for ATO to target serious crime
- OECD hybrid mismatch rules to be applied to regulatory capital
GST AND INDIRECT TAXES
- GST treatment of digital currency
- New residential premises: purchasers to pay GST
- Diplomatic and consular indirect tax concessions extended
HOUSING AFFORDABILITY
- Housing affordability measures
- Annual charge on foreign owners of underutilised residential property
- Restriction on depreciation deductions
- Housing affordability – unlocking supply
- No deduction for residential rental property travel expenses
- Improving outcomes for social housing
- Increased CGT discount for investments in affordable housing
- MIT investment in affordable housing
- CGT changes for foreign investors
- Foreign ownership in new developments limited to 50%
SUPERANNUATION
- No major new super measures, but 1 July super reforms loom large
- Merging super funds: tax relief extended until 1 July 2020
- Super fund related-party transactions – non-arm’s length income rules to be amended
- Super borrowings – LRBA integrity measure for pension cap
- Super contributions of proceeds up to $300,000 from downsizing a home
- First home super saver scheme
OTHER MEASURES
- Govt agrees with Ramsay Review – new one-stop shop for financial complaints
- Changes to the financial system
- Competition in financial system: Productivity Commission inquiry announced
- Simpler framework for foreign investment framework Extending crowd-sourced equity funding
- 457 visa changes confirmed: accountants/tax practitioners still on list
- Changes to social security measures