On 14 May 2013, the Treasurer handed down the 2013-14 Federal Budget. Below are some of the measures of immediate relevance to everyday Australians.
PERSONAL
2015
tax -free threshold increase “deferred”
The already legislated increase in the tax-free
threshold to $19,400 from 1 July 2015 will not proceed and will instead be “deferred.”
The already legislated increase in the second marginal tax rate from 32.5% to
33% from 1 July 2015 will still go ahead.
FTB Part
A change to age of eligibility
The Government announced it will change
eligibility for FTB Part A for children aged 16 years and over. FTB Part A will only be paid until the end of the
calendar year in which a child completes school. This change will start from 1 January
2014.
HEALTH
Medicare
levy increase to 2% confirmed to fund Disability Care
The Medicare levy will be increased by 0.50%
to 2% with effect from 1 July 2014, to help fund the Government's proposed National
Disability Insurance Scheme (NDIS), now renamed DisabilityCare Australia.
Phase-out
of medical expense tax offset
The Government is to phase out the net
medical expenses tax offset, with transitional arrangements for those currently
claiming the offset.
Baby
Bonus to be abolished and replaced
The Government announced that it would
replace the Baby Bonus from 1 March 2014. Instead, it will increase Family Tax Benefit
Part A (FTB Part A) payments by $2,000, to be paid in the year following the
birth or adoption of a first child or each child in multiple births, and $1,000
for second or subsequent children.
EDUCATION
Confirmation
that self-education expenses to be capped
The Government will introduce a $2,000 cap on
tax deduction claims for work-related self-education expenses per person from 1
July 2014.
HELP
discounts to be abolished
The Government will remove the discounts
applying to up-front and voluntary payments made under the Higher Education Loan
Program (HELP) from 1 January 2014.
BUSINESS
Increased funding for trusts taskforce
The Government will provide $67.9m over 4
years to the Tax Office to undertake compliance activity in relation to trust structures.
The taskforce will target the exploitation of trusts to conceal income,
mischaracterise transactions, artificially reduce trust income amounts and underpay
tax.
Suresh Rajani is
the Business Leader at TAX FIRST (NSW) & TAX FIRST (SA) - accounting and business advisory firms located in Sydney and Adelaide.
