Federal Budget 2015
In describing his second Federal Budget the Federal Treasurer, Joe Hockey said “this budget is measured, fair and responsible and is designed to promote jobs, growth and opportunity”.
The Federal budget speech delivered an upbeat outlook for Australia’s economic future and confirmed a number of measures that had been announced pre-budget.
Retirement Income Streams in Brief
The Coalition has largely left superannuation alone. Importantly the Treasurer reiterated that there will be ‘no new taxes on superannuation under this government’, affirming there will be no changes to preservation ages or taxation of superannuation, such as a tax on pension earnings or an increase in contribution related taxes.
With regard to Centrelink, from 1 January 2017, it is proposed that the assets test thresholds for the full pension will be increased. An increase in the assets test thresholds for the full pension means retirees can have a greater amount of assets (in addition to the family home) before their pension entitlement is reduced. At the other end of the scale the assets test taper rate will increase and this may mean that those pensioners who are largely affected by the asset test may have their entitlement reduced or at worst lose their pension entitlement. The good thing is that we have plenty of ‘lead in’ time to deal with this and PWW Financial Planning will assess each person’s entitlement and assist with strategies for anyone that may be adversely affected.
There have been no changes to the Deeming and Income Test thresholds.
Taxation in Brief
The following tax measures at this stage are only proposed and are pending legislation.
“Small Businesses” are defined as businesses with an aggregated annual turnover less than $2 million.
Tax Cuts for Small Business
From 1 July 2015 all small businesses will receive a tax cut.
The tax rate for companies with an aggregated annual turnover of less than $2 million will be reduced from 30% to 28.5%.
Companies with an aggregated annual turnover of $2 million or above will continue to be subject to the current 30% rate.
Individual taxpayers with business income from an unincorporated business that has an aggregated annual turnover of less than $2 million will be eligible for a small business tax discount of 5% on income tax payable on business income. It will be delivered as a tax offset and capped at $1,000 per individual for each income year.
Accelerated depreciation for Small Business Entities
The “Small business” immediate asset write-off-threshold will be increased from $1,000 to $20,000 on a per asset basis. This is available from 7.30pm on 12 May 2015 until 30 June 2017.
Fringe Benefit Tax (FBT) Exemption for Electronic Devices
From 1 April 2016, the Government will allow an FBT exemption to “small businesses” that provide more than one work related portable device (eg tablet, mobile phone, laptop, portable printer etc) to employees, even where the items have substantially similar functions.
Meal Entertainment Fringe Benefits
From 1 July 2016, employees of public benevolent institutions and health promotion charities will be subject to a separate single grossed-up cap of $5,000 for salary sacrificed meal entertainment and entertainment facility leasing expenses, where it was previously unlimited.