Australians can look forward to personal and business tax cuts as part of the Morrison Government’s 2020 Budget, being released on Tuesday.
The Budget usually comes out in May but has been delayed because of the coronavirus.
Prime Minister Scott Morrison and Treasurer Josh Frydenberg have already flagged a number of measures.
AUSSIES TO GET A TAX CUT
Prime Minister Scott Morrison says the Budget will include measures so people will be able to keep more of what they earn, although exact details haven’t been released.
Treasurer Josh Frydenberg has hinted the timing of promised tax cuts, due to begin in July 2022, were being looked at and may be brought forward.
Previously stage 2 of legislated tax cuts were expected to begin in 2022/23.
If fast-tracked, people earning more than $90,000 a year will get a tax cut, and the upper limit of the lowest 19 per cent tax rate will be increased to $45,000.
News.com.au reported on the weekend that Mr Frydenberg is planning to backdate the tax cuts so workers don’t have to wait until July, 2021 or 2022 for tax relief.
The government is also looking at bringing forward stage 3 tax cuts, which gets rid of the 37 per cent tax rate so that anyone who earns between $45,000 and $200,000 only pays 30 per cent tax.
These tax cuts were expected to begin in 2024 but are expected to start earlier.
RELATED: Tax cuts all but confirmed by Prime Minister
FIRST HOME BUYER LEG-UP
First home buyers will get extra incentives to purchase a newly built home with a deposit as low as 5 per cent.
On the weekend the government announced the First Home Loan Deposit Scheme would be extended to help an extra 10,000 people and the value of the properties eligible will also be increased.
Previously properties worth up to $700,000 in Sydney were covered under the scheme, but this will be increased to $950,000.
Melbourne’s cap will be increased to $850,000 and Brisbane to $650,0000.
It means that first home buyers with a 5 per cent deposit won’t have to pay lenders mortgage insurance on newly built properties valued at less than these amounts.
The new scheme will begin on October 6 and run until June 30, 2021.
Those wanting to use the scheme must get their mortgage through one of 27 participating lenders.
PAYING FOR APPRENTICES
The government will pay half the wages of any new apprentices.
Starting from October 5, any business that takes on a new or recommencing apprentice or trainee will be eligible for a 50 per cent wage subsidy. This is regardless of geographic location, occupation, industry or business size.
The $1.2 billion program will run until September 21 or until the 100,000 cap is reached.
It will be worth up to $7000 per quarter to businesses.
TAX BREAKS FOR SMALL BUSINESS
About 20,000 small businesses will get access to tax breaks and cuts to red tape.
Treasurer Josh Frydenberg announced on Friday businesses with an aggregated annual turnover between $10 million and $50 million will have access to up to 10 tax concessions.
The changes will be included in the Budget and will happen in three phases.
• July 1: Eligible businesses will be able to immediately deduct certain start-up expenses and certain prepaid expenditure;
• April 1, 2021: Eligible businesses will be exempt from the 47 per cent fringe benefits tax on car parking and multiple work-related portable electronic devices, such as phones or laptops, provided to employees;
• July 1, 2021: Eligible businesses will be able to access the simplified trading stock rules, remit pay as you go (PAYG) instalments based on GDP adjusted notional tax, and settle excise duty and excise-equivalent customs duty monthly on eligible goods. Businesses will also have two years to amend their income tax assessments, rather than four years, for income years starting July 1, 2021. This gives them certainty about their tax affairs because it means the ATO also can’t amend the tax assessment after the time limit has passed (except in some exceptional situations such as evasion or fraud).
The Commissioner of Taxation will also be given the power, from July 1, 2021, to create a simplified accounting method determination for GST for businesses with a turnover of less than $50 million.
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MAKING IT CHEAPER TO RETRAIN WORKERS
Businesses will no longer have to pay Fringe Benefits Tax (FBT) if they pay to retrain or reskill employees who are moved to a different role in the business.
Treasurer Josh Frydenberg announced on Friday, October 2 that a FBT exemption will be available from the date of his announcement.
It only applies to employer-provided retraining and does not include programs provided through salary packaging or government-supported places at universities, as the government says they already receive a benefit.
Previously businesses would have to pay FBT if the training was not sufficiently connected to the employee’s role. For example, a business would be taxed if it provided web design training to a sales assistant, to help them take on an online marketing role.
It’s hoped that by providing an exemption, employers will be encouraged to help workers transition to new employment opportunities within or outside their business.
The government is also considering possible changes for workers that pay for their own training. Currently tax deductions are limited to training related to a worker’s current employment.
RELATED: Victorian lockdown post threat to businesses
MANUFACTURING BOOST
The government will also invest an extra $1.5 billion in manufacturing over four years, with most of this money going towards the $1.3 billion Modern Manufacturing Initiative (MMI), a co-investment fund for large projects.
Six sectors have been selected as priority areas:
• Resources technology and critical minerals processing;
• Food and beverage manufacturing;
• Medical products;
• Clean energy and recycling;
• Defence industry; and
• Space industry.
More announcements are also expected to be made around research and development incentives.
The aim is to help make manufacturers in AustAsia more competitive, build scale in promising areas and ensure enough capability in areas of national interest.
The Manufacturing Modernisation Fund will also be given an extra $52.8 million to provide grants of between $100,000 and $1 million on a three-to-one funding basis for transformational investment in technologies and processes.
The government will invest another $107 million in a new supply chain resilience initiative.
RELATED: Morrison’s gas-led recovery questioned
MORE RESOURCES FOR AGED CARE
The Morrison Government is under pressure to increase funding for aged care after a royal commission report into the coronavirus pandemic called for urgent action.
A special report released on Thursday noted the aged care workforce was under-resourced and overworked.
The urgent areas that the inquiry calls for action on include:
• The deployment of accredited infection prevention and control experts into aged care homes across Australia;
• More funding to providers to ensure there are adequate staff available to deal with external visitors, and
• A new Medicare Benefits Schedule to increase the provision of allied health and mental health services.
Aged Care Minister Richard Colbeck confirmed the Morrison Government would accept all of the recommendations in the report and Finance Minister Mathias Cormann said on Friday that implementation on four of these was substantially under way.
“There will be more to say about all of this in the Budget next week,” Mr Cormann said.
He noted that the government had committed more than $1.6 billion in extra resources to aged care since the beginning of the COVID crisis, and had immediately committed a further $40 million in relation to various measures.
https://news.google.com/__i/rss/rd/articles/CBMiqAFodHRwczovL3d3dy5uZXdzLmNvbS5hdS9maW5hbmNlL2Vjb25vbXkvYXVzdHJhbGlhbi1lY29ub215L2J1ZGdldC0yMDIwLXdoYXQtd2Uta25vdy1zby1mYXItYWJvdXQtdGF4LWN1dHMtYW5kLW90aGVyLW1lYXN1cmVzL25ld3Mtc3RvcnkvMjllMjkwODVmM2NiMTQzNjM4M2Q0ODVlZTY2ZmUzM2PSAagBaHR0cHM6Ly9hbXAubmV3cy5jb20uYXUvZmluYW5jZS9lY29ub215L2F1c3RyYWxpYW4tZWNvbm9teS9idWRnZXQtMjAyMC13aGF0LXdlLWtub3ctc28tZmFyLWFib3V0LXRheC1jdXRzLWFuZC1vdGhlci1tZWFzdXJlcy9uZXdzLXN0b3J5LzI5ZTI5MDg1ZjNjYjE0MzYzODNkNDg1ZWU2NmZlMzNj?oc=5
2020-10-04 21:49:50Z
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