Treasurer Josh Frydenberg handed down his second Federal Budget which was all about creating new jobs and getting the unemployed back into work again to drive the economy.
Key Budget Measures
The key revenue measures announced include:
Bring forward of the second stage of the personal tax cuts by 2 years to 1 July 2020, lifting the 19% threshold from $37,000 to $45,000, and lifting the 32.5% threshold from $90,000 to $120,000. The low and middle income tax offset will be retained for 2020-21.
The Stage 3 personal income tax cuts remain unchanged and will commence in 2024-25 as already legislated.
Loss carry-back: The Government will allow eligible companies to carry back tax losses from the 2019-20, 2020-21 or 2021-22 income years to offset previously taxed profits in 2018-19 or later income years.
Asset write-off: For eligible capital assets acquired from 7:30pm AEDT on 6 October 2020 and first used or installed by 30 June 2022, over 99% of businesses will be able to write off the full value of any eligible asset they purchase for their business. This will be available for small, medium and larger businesses with a turnover of up to $5 billion until June 2022.
Superannuation: Several measures were announced. Commencing on 1 July 2021, the Your Future, Your Super package will see the following changes:
YourSuper portal - the ATO will develop systems so that new employees will be able to select a super product from a table of MySuper products through the YourSuper portal;
stapled accounts - an existing super account will be "stapled" to a member to avoid the creation of a new account when that person changes their employment;
MySuper benchmarking - from July 2021, APRA will conduct benchmarking tests on the net investment performance of MySuper products, with products that have underperformed over two consecutive annual tests prohibited from receiving new members until a further annual test that shows they are no longer underperforming;
super trustees - best financial interests duty - the Government will legislate to compel super trustees to also act in the best "financial" interests of their members. The Government will also require super funds to provide better information regarding how they manage and spend members' money in advance of Annual Members' Meetings.
R&D: For small companies, those with aggregated annual turnover of less than $20 million, the refundable R&D tax offset will be set at 18.5 percentage points above the claimant's company tax rate, and the $4 million cap on annual cash refunds will not proceed. For larger companies, those with aggregated annual turnover of $20 million or more, the Government will reduce the number of intensity tiers from 3 to 2.
ATO funding: The Government will provide $15.1 million to the ATO to target serious and organised crime in the tax and super systems.
JobMaker hiring credit: The Government announced a new JobMaker hiring credit to encourage businesses to hire younger Australians. The JobMaker hiring credit will be payable for up to 12 months and immediately available to employers who hire those on JobSeeker aged 16-35. It will be paid at the rate of $200 per week for those aged under 30, and $100 per week for those aged between 30-35. New hires must work for at least 20 hours a week. All businesses, other than the major banks, will be eligible.
Age Pensioners will receive an additional $250 payment from November 2020 and a further $250 payment from early 2021.
A targeted CGT exemption for granny flat arrangements.
Expanded access to a range of small business tax concessions (eg start-up expenses, FBT exemptions on car parking, access to simplified trading stock rules) by increasing the small business entity turnover threshold for these concessions from $10 million to $50 million.
An FBT exemption for employer provided retraining and reskilling benefits provided to redundant, or soon to be redundant, employees where the benefits may not be related to their current employment.
The ATO will have the power to allow employers to rely on existing corporate records, rather than employee declarations and other prescribed records, to finalise their FBT returns.
Please contact the team at DiSavia Consulting for further details of the Federal Budget
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