With the 2019 Federal Election just days away, what does it all mean for all of us? I certainly have been asked this on a few occasions recently.
So to assist you in the lead up to the election I have attached a bullet point summary of some of the proposed measures both the current government and the opposition have declared in recent weeks.
This is by no means a ‘how to vote’ card, and please take into consideration that we are only showing you a snapshot of what both parties have presented in regard to their tax related policies over the past few weeks!
As you will no doubt see over the weekend, it is now time for “Australia to decide!”
Labor party tax and superannuation changes:
Limit cost of tax affairs to $3,000 – individuals
Negative gearing to be limited to new houses from January 1st, 2020. All investments prior to this date to be exempt
Capital gains tax discount to reduce from 50% to 25%, effective January 1st, 2020 – individuals
Excess franking credits no longer refundable – individuals and superannuation funds
Trusts to be taxed at 30%
Reinstating budget repair levy, thus increasing top marginal tax rate to 49%
Low and middle income tax offsets to be increased – workers earning less than $37,000 receive a tax cut up to $350, those earning between $37,000 and $48,000 will have a low income offset up to $1,080
Close the First Home Super Scheme
Changes to depreciation with a 20% depreciation rate in the first year for all eligible assets. Future years depreciation remains at current rates
Tax incentive to employers who are employing either;
Staff under 25, or older than 55, or a parent or carer
People who have been unemployed for more than three months
Rewarding and protecting whistle-blowers who report entities evading tax. Reward up to $250,000
Limit direct borrowing by self-managed superannuation funds
Fast superannuation guarantee charge from 9.5% to 12%
Superannuation contribution caps and thresholds:
Lowering annual non-concessional cap from $100,000 to $75,000
Reduce high-income contribution threshold from $25,000 to $20,000
Remove personal superannuation contributions deductibility
Liberal party coalition tax and superannuation changes:
Changes to personal income tax rates
Phase 1: 1 July 2022 – 19% threshold to increase to $45,000 (currently $37,000)
Phase 2: 1 July 2024 – 32.5 % to be reduced to 30%
Phase 3: 1 July 2024 – 37% bracket to be abolished
Low and middle income tax offsets to be increased
Phase 1: workers earning less than $37,000 receive a tax cut up to $350, those earning between $37,000 and $48,000 will have a low income offset up to $1,080 (as per Labor Party above)
Phase 2: From 1 July 2022, the $350 tax cut to increase to $700
Increased Medicare levy low income family threshold
Fast track small business tax rates – From 1 July 2021 corporate tax rate to decrease to 25%, five years ahead of previously planned
Improving flexibility for senior Australians to contribute to superannuation
Expand the size of self-managed superannuation funds from four to six members