Federal Budget 2018-19

The noise out of Canberra in the lead up to the Budget really did ring true, this was clearly a pre-election Budget. Luckily for the Government, the tax take has been soaring, giving them the wriggle room to deliver some goodies.

Global economic growth is providing the most favourable backdrop for the Budget in years. Even better still, businesses and super funds have increasingly run out of their tax losses, meaning that a given economy is now generating more revenue. This has allowed the Treasurer to bring off a trifecta – doing away with last year’s announcement of an increase in the Medicare levy, delivering personal tax cuts from 1 July this year, and yet sneaking back into surplus a year earlier than the Government had earlier estimated.

As well as personal tax cuts, some of the more significant tax announcements included:

• An extension of the instant asset write-off for businesses with a turnover up to $10 million for purchases of up to $20,000
• Rules around claiming the research and development incentive have been tightened
• To tackle the black economy, a limit of $10,000 for cash payments made to businesses will be imposed, and payments to employees and contractors where the business fails to properly withhold PAYG will be non-deductible
• A number of measures were introduced to improve the flexibility and efficiency of the superannuation system including a ban on exit fees
• The regulators were big recipients of additional funding, with the ATO, ASIC, the Tax Practitioners Board and Treasury benefiting.

Explore the details in our Federal Budget 2018-19 report.