Our Quick Guide to the 2018 Federal Budget

Federal Budget 2018/19

 

FEDERAL BUDGET 2018/19

While every news outlet and social media channel is flooding us with mountains of information on Federal Budget 2018/19 – here is our quick “5 minute guide”  – the interesting, the expected and the unexpected….

Staggered reduction in personal income tax rates…Stage 1 will roughly equate to the cost of 1-2 Perth coffees per week

Medicare levy low-income thresholds to be increased

More funding ($130.8M) for the ATO to enable increased audit activities directed towards individual taxpayers

$6.7 million will go towards increased Domestic Violence Response Training (DV Alert)

Significant changes to the R&D tax incentive

$20,000 instant asset write-off extended for small businesses (less than $10M turnover) to 30 June 2019

GST reporting streamlined by reducing the number of BAS GST questions to three

Deductions for expenses associated with holding vacant land not genuinely used to earn income will be denied (only available as addition to cost base for capital gains tax purposes)

Payments to employees or contractors will no longer be deductible where any PAYGW due has not been paid, from 1 July 2019

Restart Wage Subsidy of up to $10,000 paid to employers of older Australians wanting to stay in the workforce.

Maximum number of members in SMSFs will increase to 6 from 1 July 2019

Taxable payments reporting system for payments to contractors will be extended to include security services, road freight transport and computer system design industries, effective from 1 July 2019.

Businesses will no longer be allowed to receive payments greater than $10,000 in cash

New black economy hotline for dobbing in anyone making under-the-table transactions.

Audits reduced from annually to every 3 years for SMSF with a good compliance record, effective from 1 July 2019

Directors Penalty Regime will be extended to make directors personally liable for unpaid GST, luxury car tax and WET (in addition to existing inclusions of PAYGW, superannuation)

Budget deficit forecast to drop to $14.5 billion in 2018-19, after hitting $18.2 billion in 2017-18. Projected to hit a positive balance of $2.2 billion in 2019-20, before surpluses increase to $11 billion in 2020-21 and $16.2 billion in 2021-22.

Unemployment will be 5.25 per cent, down from 5.5 per cent in 2017-18 and projected to fall again to five per cent in 2021-22

Inflation at 2.25 per cent in 2018-19, up from 2 per cent in 2017-18. Set to hit 2.5 per cent next year and remain there for the following two years.

$24.5 billion in funding for major transport projects and initiatives as part of a $75 billion rolling infrastructure plan over the next decade.

More than $50 million worth of upgrades to airport security.

$154.3 million pledged over five years to get Australians, particularly kids, more physically active and combat obesity.

$1.6 billion to go to providing an extra 14,000 high-level home care packages for seniors who want to remain in their homes.

$29.9 million for artificial intelligence and machine-learning technology research and the development of a standards framework, road map, and an “AI Ethics Framework” to “support the responsible development of these technologies”.

$500 million to help restore and protect the Great Barrier Reef.

No changes to capital gains charges or negative gearing.

Crackdown on companies such as Facebook, Google, Amazon, and Apple expected to return $7 billion in corporate tax income each year

Obviously there are many more announcements which have been made in tonight’s budget, these are just some of the more interesting for your reference.
If you have any queries regarding these announcements or any others, do not hesitate to contact us.

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