Federal Budget – what you need to know

At 7:30pm tonight the government will announce the budget.
They’ve even got a countdown timer at –  https://budget.gov.au/

1. Tonight’s Budget
2. Past Budgets
3. Next Steps

TONIGHT’S BUDGET
A few things I’ll be watching for tonight:
– Whether the $1,080 LMITO (the ‘Lamingon’/Low Middle Income Tax Offset) which is reduced from employees regular payslips, will be extended. (Otherwise there will be an extra $1,080 tax to pay).
– Childcare Out-Of-Pocket costs
– Employment Concessions for Business Owners
– Superannuation – Will it go to 10%? Will it continue going up to 12% as previous budgets planned for.

PAST BUDGETS (Budget 101)
The more things change, the more they stay the same.
 – Some announcements won’t happen
It is easy to ANNOUNCE things! It is a bit harder to write the law, pass House of Reps, pass Senate and receive Royal Assent.
One year they announced a 50% tax cut on investment earnings – it just never happened.
 – There may be some loophole you wish you knew and acted upon before 7:30 tonight
Many budget measures can apply immediately and budgets in the past have introduced new taxes and closed loopholes.
If you bought an investment property before Capital Gains Tax was introduced in September 1985 you’d be laughing.
 – Many things won’t apply to you
The Government may cut excise tax for Brewers for example.
 – Some measures won’t start immediately
A previous budget announced that Super would rise from 9% to 12% over time. The timeframe has been delayed – currently we are at 9.5%.
 – There is a GREY AREA between Announcements and Law
As an Accountant, we sometimes have to consider whether 100%, 50% or 0% of the announcement will become law – then discuss with our clients.

NEXT STEPS
Update of a few key points
Overnight a number of Extreme Tax Nerds will be working through every element of the budget so that us regular Tax Nerds (aka yours truly) can receive a summary of all the key points.
Once I’ve got a summary, I plan to come back with an update of a few things I think may matter to you.

Open of Tax Planning Season
There is a lot we can do within the existing laws (and potentially tax planning given tonight’s opportunities).

Beware super contributions to be received by 30 June – these need to be made by you a lot sooner than 30 June.

If there is something you want advice about – feel free to make a time via www.calendly.com/ipas
As always, I’m on (02)83855677 or 0488669494 if you want to give me a call.

Scott

About Scott Kay

Integrity Plus Accounting

Scott Kay is currently a husband and father of one young daughter. He founded Integrity Plus Accounting over 4 years ago and has had his own clients for over 10 years. He has worked for 3 other accounting businesses and loves to help clients grow – in their business, their wealth, their mindset and their lives.