The Federal Budget was delivered by the Government on 2 April. A formal reply from the Opposition was two days later.
The Government plan and the Opposition plan for personal income tax cuts are very much the same. The cuts proposed by the Government for 2018/19 will average $1080 per person (for a person on a low to medium personal income).
These personal income tax cuts of the Government are not law though and will not be until they pass both Houses of Parliament. Please see below for a summary of key tax policies from both parties.
Unfortunately none of these measures will pass so close to a Federal Election, now scheduled for 18 May. So we expect plenty of argument from both sides of politics in the next four weeks and the Election outcome will no doubt determine which laws are put into place and the economic impact thereafter.
Some key points that may affect your business:
- Federal budget changes to the instant asset write-off (equipment and tools of trade) and have been passed by both houses of parliament, and affects businesses with an annual turnover under $50 million. This change effectively creates three tiers of thresholds with start dates in the 2019 income year.
The rules mean that the immediate asset write off will be three-tiered for 2018/19:
💰$20,000 per asset 1/7/2018 – 28/1/2019
💰$25,000 per asset 29/1 – 1/4/2019
💰$30,000 per asset 2/4 – 30/6/2019
This three tiered asset threshold with staggered commencement dates throughout the 2019 financial year has been called ‘unnecessarily complicated’ and small business taxpayers will need to review their records carefully in order to determine which assets are eligible for the instant asset write-off and which are not.
It is highly recommended that you seek advice on your individual situation and how this applies to your business before purchasing assets. There is no benefit to spending money for the sake of it.
- Both parties committed to lower company tax rate for small businesses but as each party has its own small business definition the impact of this will be determined by the Election result in May.