Budget 2019-20: What you need to know

With an election looming, the 2019-20 Budget held very few surprises for advisers.  

Budget 2019-20 was a ballot box Budget aimed at bolstering perceptions and consumer sentiment.

What is missing from the Budget is any statement on the previously announced measures that would deny non-residents access to the CGT main residence exemption. Shadow Treasurer Chris Bowen recently released a media release calling on the Government to drop the “unfair ex-pat CGT changes.” So, unless the Government returns from the election with a majority, these changes will not come to fruition.

Individuals

  • $19.5bn personal income tax cut package
  • Low and middle income tax offset (LMITO) increased
  • Low income tax offset (LITO) increased
  • One-off energy assistance payments
  • Medicare levy thresholds increased
  • Higher Education Loan Program cost recovery program delayed

Superannuation

  • Superannuation ‘work test’ watered down & age limit for spouse contributions increased
  • Permanent tax relief for merging super funds
  • Streamlining the calculation of ECPI
  • Opt-in insurance delay
  • Defence Force members can stay in super fund after discharge

Business           

  • Instant asset write-off increased to $30k and expanded to businesses under $50m
  • Division 7A changes postponed
  • Luxury car tax refunds increased for primary producers and tourism operators
  • North Queensland flood grants to be tax-free
  • Queensland storm payments to be tax-free
  • Increased funding for Export Market Development Scheme

Compliance

  • $1bn ATO ‘sugar hit’ to tackle large corporates and high net wealth individuals
  • Recovering unpaid tax and superannuation liabilities         
  • $607m to follow through on response to Banking Royal Commission           
  • ABN status stripped for non-compliance
  • Support for small business in tax disputes
  • Sham contracting unit established           
  • Registration scheme for Labour Hire operators

International agreements           

  • Australia-Israel Tax Treaty          
  • Australia Hong Kong Free Trade Agreement         
  • Indonesia Australia Comprehensive Economic Partnership Agreement        
  • More countries added to information exchange list           
  • More work and holiday visas for Indonesians        

Other   

  • $3.9bn Disaster response funding
  • Climate solutions package

Need assistance? The Hayes Knight team can assist you.

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