Now that the Prime Minister has stated that the Budget “will be, for all practical purposes, the White Paper” in a radio interview, we can put the idea of a radical rethink of the tax system in the too hard basket.
So in May we get to compare the less than comprehensive tax policies of the ALP (increasing the excise on tobacco, making a minor change to thin capitalisation safe harbours, reduce a threshhold from $300k to $250k (Division 293 tax), only allow $75k a year to come out of super tax free each year, changing a rate of a concession from 50% to 25% (CGT discount) and limiting debt deductions that salary and wage earners can use (negative gearing)… boring) to the ideas of the Government that sound less and less comprehensive as the Budget gets closer (changes to super and the marginal tax rates???).
I would hate to be sitting in the Revenue Group of the Treasury looking for exciting changes to tax and super policy to get my teeth into. This does not look like much more than fiddling with rates and thresholds.
The only tax and super policy that we know is being worked on at the moment in the Revenue group is the following…
Draft law in the public for consultation
- Commissioner’s power to modify the law
And the stuff that is announced but nothing has been done other than an announcement
- Innovation statement stuff
- No low value GST threshold – GST changes are always is slow as each State and Territory has to have a go at it
- Amendments the tax hedging rules
- Functional currency rules — extending the range of entities that can use a functional currency
- Debt/equity tax rules — limiting scope of integrity rule
- Taxation of financial arrangements — foreign currency regulations — technical and compliance cost savings amendments
Remember we were told by the current Government in 2014 that…
There is evidence that the economic costs of Australia’s tax system are higher than they need to be. Australia’s tax system was designed in a different era, when the economy was very different. It was not designed to deal with multinational trade, increasing global competition for investment, the internet and the digital economy. The implications of an ageing population requires a fresh approach to tax.
Therefore we were going to have a comprehensive review of the tax system. YEAH RIGHT!!!