Well the election is over and it seems everyone has resumed running their businesses again. It is a quirk of the economy here in Australia – when a Federal election is called everyone holds their breath and stops spending! Now we can get on with our daily business! Yes - the result was a surprise and now what it means is:
Middle-income earners are to receive tax cuts for those earning up to $126,000.
From this tax time — the 2018–19 financial year — low and middle-income earners will have their tax reduced by up to $1,080 for single earners and up to $2,160 for dual-income families. Interestingly, it means the New Government will probably have to pass the legislation retrospectively as it’s unlikely to be passed before the financial year ends.
The new government has also proposed reducing the 32.5 per cent tax rate to 30 per cent by in 2024–25. They have also proposed projects that will deliver approximately 13.3 million taxpayers permanently lower taxes in 2024–25 as a result of its income tax plans.
For small business the instant asset write-off threshold will now be bumped up to $30,000, with the measure expanded to include medium businesses with a turnover of up to $50 million. This measure has already passed parliament, and will take effect from 2 April, 2019 and run to 30 June 2020. Note, because this measure began at $20,000 write off for the first part of the year and then increased to $25,000 and then to $30,000 – it will depend on when the items were purchased as to when the write off will apply.
Note, the Prime Minister - Mr Morrison announced a new scheme for first home buyers which allows them to access 95 per cent loan-to-value ratios.
The First Home Loan Deposit Scheme, which will partner with private lenders, will be available to first home buyers who have been able to save a deposit of at least 5 per cent.
Mr Morrison committed to no new taxes on superannuation last month. However, it’s unclear how long this guarantee is in place for. The good news is the new Government will again move to have six-member self-managed superannuation funds (SMSFs) legislated, despite the proposal being removed from a bill introduced earlier this year.