With the federal election now over, what’s next for Aussie businesses and families?
In this analysis, we outline the key tax policies put forward by our re-elected Government, and their likely impact on:
The outlook is favourable for small businesses, which continue to be supported by the Government with various investment incentives. The Government has also already passed the laws required to increase the instant asset write-off threshold to $30,000, and to reduce the company tax rates for small and medium companies.
Despite Labor’s commentary during the federal election campaign, the Government has enhanced its financial commitment and has taken many steps – including legislative and administrative means – to reduce tax avoidance among larger organisations and wealthy individuals. However, those who are law abiding should not expect to be impacted by any major tax changes.
We expect there is a sense of relief among tax payers that Labor’s proposed restrictions on franking credits and negative gearing will not happen, so minimising the impact on what could have been a longer term (possibly negative) impact on Australia’s asset investment landscape.
Whilst the Government appears to remain committed to supporting innovation and R&D tax incentives for innovative businesses, their level of enthusiasm and commitment to support development in this area into the future remains unclear.
Income tax rates for individuals and families was the major battle ground during the election. This will continue to be the case while the Government endeavours to get their announced policies through both the House of Representatives and the Senate.
Most tax payers would welcome the Government’s limited changes to superannuation, which provide more certainty for those planning for retirement.
There is less certainty, however, as to what will happen to a significant number of policy proposals that were made during federal budget, such as the amnesty for unpaid superannuation contributions by businesses, or the proposal to disallow expense deductions for vacant land to prevent ‘landbanking’ by property developers. Legislation on these and other measures was not passed prior to the election. We await further announcements from the Government to confirm the status of these tax related measures.
With any queries, please contact your local Bentleys advisor.