Federal Budget 2012-13
As predicted by almost every significant media outlet during the past week, the treasurer has announced a federal budget surplus of $1.5 bn for the 2012-13 year. A budget surplus is viewed by many in the community, perhaps a majority, as a good thing and therefore it is curious that the budget, at first glance, has a 'flat' feel to it. Could this be because the budget both gives and takes away with equal gusto?
View the key measures announced in the federal budget here.
Families will inevitably benefit from the 'schoolkids' bonus of either $820 or $410 (although this is arguably merely a boost for those most vulnerable to the carbon tax) but the gain is at the expense of the education tax refund which will be removed. Further, the Family Tax Benefit Part A will increase by $300 for families with one eligible child and $600 for two or more children however the benefit will be limited to children under 18 years of age.
Business taxpayers are confronted with a similar scenario. The loss carry back initiative will assist some companies with their cash flows however this is offset by a scrapping of the announced reduction in the company tax rate to 29% and significant limitations will be placed on access to LAFHA benefits which will increase the cost of the temporary relocation of employees.
There are budget announcements which will be of great concern to Australians who seek to maximise their savings both now and in the longer term, in particular:
- The scrapping of the 50% discount in respect of assessable interest income which was to commence from 1 July 2013; and
- The deferral until 1 July 2014 of the higher concessional contribution cap of $50,000 for persons over 50 years of age with superannuation account balances below $500,000.
High net worth individuals will no doubt have been expecting the increase in tax on concessional superannuation contributions but would have been less prepared for the limitations placed on availability of the employment termination payment offset and the means testing of the net medical expense tax offset.
The key measures announced in the federal budget which both 'give' and 'take away' can be viewed here.