On 2 April the Australian Government handed down it’s 2019 Budget, earlier than usual thanks to the upcoming election.

We have reviewed the budget and here’s our summary of the key points that relate to Personal Income Tax, Business Tax and Superannuation.

Personal taxation

  • From 2018-19, low and middle income tax offset will increase from a maximum amount of $530 to $1,080 per annum and the base amount will increase from $200 to $255 per annum.
  • The Medicare levy low income thresholds for singles, families, and seniors and pensioners will increase from the 2018-19 income year.
  • Changes to the Higher Education Loan Program set to commence from 1 January 2019, will now take effect from 1 January 2020.

Business taxation

  • Instant asset write-off increased to $30k and expanded to businesses under $50m from 2 April 2019 to 30 June 2020.
  • The significant changes to the way Division 7A works were intended to start taking effect from 1 July 2019.  These reforms have now been pushed back to 1 July 2020.
  • Eligible primary producers and tourism operators will be able to apply for a refund of any luxury car tax paid, up to a maximum of $10,000 for vehicles acquired on or after 1 July 2019.
  • Qualifying grants paid to primary producers, small businesses and non-profit organisations affected by the North Queensland floods will be treated as non-assessable non-exempt income, which means that they should be tax-free.
  • Certain payments made to primary producers in the Fassifern Valley, Queensland who were affected by storm damage in October 2018 will be exempt from income tax.
  • $61m over three years has been provided to support Australian businesses to export Australian goods and services to overseas markets.
  • From 1 July 2021, Australian Business Number (ABN) holders will be stripped of their ABNs if they fail to lodge their income tax return. In addition, from 1 July 2022, ABN holders will be required to annually confirm the accuracy of their details on the Australian Business Register.

Superannuation

  • Australians aged 65 and 66 will be able to make voluntary superannuation contributions (concessional and non-concessional) without meeting the Work Test from 1 July 2020.
  • The age limit for spouse contributions will be increased from 69 to 74 years from 1 July 2020.
  • The Government will permanently extend the current tax relief for merging superannuation funds that was due to expire on 1 July 2020.
  • The Government will delay until 1 October 2019, the start date for reforms that ensure insurance within superannuation is only offered on an opt-in basis for accounts with balances of less than $6,000 and new accounts belonging to members under the age of 25 years.

Download our Budget 2019-20 Ballot Box for full details.