Federal Budget 2012/2013
Wayne Swan has delivered his fifth Federal Budget and it seems that while he's found the sweeties bag for families, he's left business owners and wealthier Australians feeling like their pockets have been both raided and denied.
Swan's determination to bring the budget into surplus – even a measly $1.5 billion – is the product of smoke 'n mirrors to manage political ego ahead of next year's election and less about delivering the growth and vision the business community is looking for. And if you were looking forward to a simpler, fairer tax system, you're out of luck.
To make good on this promise however, the Government needs to turn a $44bn deficit in 2012 into a $1.5bn surplus in 2013. This is where business comes in.
, the Federal Budget was an itemisation of what you're not getting; $4.8bn in company tax savings apparently. But the changes in company tax rates – due to commence on 1 July for small business, never saw the light of day. So, it's hard to feel the effects of something you never experienced.
The upside is not what was announced but what wasn't. Many of the previously announced small business initiatives and the more generous of the existing concessions – such as the small business CGT concessions – have been preserved. Instant write-offs remain as does the ability to carry back losses and offset them against tax paid up to two years earlier.
The net effect, however, is a Budget offers nothing that will significantly change the shape of business in Australia, because it lacks the vision business needs for growth.
What will be felt on the ground however is the drive to collect every tax dollar owing. In the Budget speech, Treasurer Wayne Swan pointed out that tax receipts are down $150bn since the GFC. What this is likely to mean, emphasized by the $378m in direct ATO compliance activity funding, is a more aggressive compliance
focus on capital gains, GST and tax schemes.
Swan's Budget has been designed to ease the burden on families by injecting a little extra cash
for helping with education expenses as well as increased Family Tax Benefit A. While largely seen as an attempt to re-connect with Labor values ahead of a distant election, there are some elements that will be broadly welcomed by struggling families.
The Education Tax Refund has been replaced by an annual Schoolkids Bonus at a cost of $2.1 billion over four years. If you've not received your full rebate under the ETR, then expect to see a payment for the balance in the coming months.
The Family Tax Benefit A will increase for eligible families – those with one child will receive $300 more per year, whilst families with more than one child will receive $600 more per year. Families receiving the base payment will receive $100 and $200 respectively. The eligibility criteria is also changing.
The National Insurance Disability Scheme
is set to get underway with $1 billion funding over four years to help 10,000 people with significant and permanent disabilities with the cost of their care.
A new income support supplement is also on its way. At $1.1 billion over four years, it will be a non-taxable supplement available to Australians receiving a number of Government allowances and paid in March and September each year.
On paper, it would appear that Swan has a hefty task ahead of him, taking the $44 billion deficit and turning it into a $1.5 billion surplus by next year.
But recent commentary suggests it's akin to the old magic trip of finding the ball under the magician's cups – look hard enough and you'll see that Swan has been doing an adept impersonation of Fred Astaire in moving spending and cuts around the balance sheet to make it seem a bigger task than perhaps it is.
Click through to the pages below for details about how the Budget affects you.
Family & Community
Download the 2012/13 Budget Summary
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Last updated May 2012. This article is provided for information purposes only and should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.
This article is provided for information purposes only and correct at the time of publication. It should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.