The Labor Government released its first Federal Budget and as expected it painted a gloomy picture on the economic outlook. As such, there were not many significant announcements from a tax perspective for small business or individual taxpayers. Here is a summary of some of the more relevant proposed measures:
- Confirmation the low and middle income tax offsets will cease on 30 June 2023. This will result in those impacted taxpayers incurring more tax from 1 July 2023. - Confirmation of the expansion of the downsizer contribution into super for taxpayers aged over 55 years of age reducing the age from the current limit of 60 years of age. This measure allows a once off contribution into super of up to $300,000 if all the eligibility conditions are met. This change will apply from the first day of the first quarter after the proposed Bill receives Royal Assent. - Confirmation of the exempt fringe benefits tax status of fully electric cars purchased and ready for use after 1 July 2022 which are purchased for a price below the luxury car tax limit. Although all the costs will be FBT free to the employer, the benefit will still need to be recorded as a reportable fringe benefit to the employee. - Expansion of the paid parental leave scheme with the leave being extended to a maximum of 26 weeks by 2026. The leave is also becoming more flexible with either or both parents being eligible to take or share this leave if eligible and the income test for eligibility being expanded to include a $350,000 joint family income threshold. - Increasing the access and benefits of the child care subsidies with the maximum rate for the first child in care increasing from 85% to 90%. The joint income eligibility threshold for this is also proposed to increase from the current amount of $356,756 to $530,000. If you have any queries regarding these proposals, please do not hesitate to contact us.