The family home - and the odd family investment property - both look safe from the Henry tax review, after the Treasurer yesterday went close to ruling out any changes to the negative gearing system.
Wayne Swan has already rejected reports that the Henry review would propose putting a wealth tax on expensive homes.
The real estate industry has voiced concern about tinkering with negative gearing, which allows investors to claim interest expenses on rental properties.
The Treasurer stopped short of saying there would be no changes to the system. ''I'm not going to impinge on matters that may be the purview of the Henry inquiry. But I think if you go back and look at my comments over the years I have not been a critic of negative gearing [as] some have been out there.''
Tax Office figures released this week show investors saved about $4 billion from negatively geared property.
The figures also show that about one in seven taxpayers owns investment property.
Negative gearing has been criticised for increasing demand for property, pushing up prices and harming affordability.
On Thursday the Housing Institute of Australia warned against any changes to the system of negative gearing.
"Fiddling with the taxation treatment of residential rental investment is dangerous,'' its executive director, Graham Wolfe, said. "If the Australian government [wants] a mature discussion with the community about tax policy … then there should be a structured program of consultation set against the Government's response to the Henry taxation review."
The Hawke government tried to quarantine negative gearing for new properties in 1985, but faced a massive backlash.
''I still wear the scars of that,'' the Treasurer secretary, Ken Henry, said in late 2008 of the ill-fated changes.
Mr Swan's comments on the tax review came in a week that saw the government keep up its attack on the Coalition's leadership team after Barnaby Joyce was dumped from the opposition finance portfolio.
The Treasurer turned his sights on the opposition Senate leader-in-waiting, Eric Abetz, declaring him unfit for the job following his entanglement in the Godwin Grech and OzCar affair.
Senator Abetz has nominated for the position after Nick Minchin resigned this week.
''There are many, many unanswered questions about Senator Abetz's role in the OzCar affair,'' Mr Swan said. ''They reflect very poorly on [him] and make him unqualified to lead a major party in the Senate.''
Senator Joyce told ABC radio yesterday he was disappointed with criticism from his own side of politics about his fitness for the role of finance spokesman.
''You can't campaign against anonymous sources from your side,'' he said.
The Opposition Leader, Tony Abbott, said Senator Joyce's new role in regional affairs, infrastructure and water was even more important than the finance portfolio.
''No one can read the popular mood and speak the popular language like Barnaby,'' Mr Abbott said.
Mr Swan said the government would release the Henry tax review before the May budget.
(Source: SMH)
Small Business Depreciation/Write-off Changes
You can see more posts here ==> Henry Tax Review Posts
The Henry Tax review of Australia's taxation system was released today (02/05/2010) with good news for small businesses.
The capital allowances provisions will be changed in order to allow small businesses:
- • to write off immediately assets valued at under $5,000 (compared with the current $1,000 limit) and
- • to write off other assets (ie assets valued at over $5,000) in one depreciating pool at the rate of 30%. Currently, depreciating assets may be allocated to 2 different depreciating pools. This will not apply to buildings.
The government will consult on the details of the new rules during the 2010/11 year.
Henry Tax Review - Reward for Low Income Earners
You can see more posts here ==> Henry Tax Review Posts
The Henry review of Australia's taxation system was released today with good news for low income earners. Proposed in the Henry Tax Review is a $500 low income earners Government contribution into superannuation funds from 1 July 2012.
The Government will provide a contribution of up to $500 annually into the superannuation account of workers on adjusted taxable incomes of up to $37,000. This will provide a reward for savings for low income earners by ensuring no tax is paid on SG contributions. The Government will also retain the co-contribution scheme.
For more details visit this FREE fact sheet on ==> Superannuation - Low Income Earners Government Contribution.
The Henry review of Australia's taxation system was released today with good news for low income earners. Proposed in the Henry Tax Review is a $500 low income earners Government contribution into superannuation funds from 1 July 2012.
The Government will provide a contribution of up to $500 annually into the superannuation account of workers on adjusted taxable incomes of up to $37,000. This will provide a reward for savings for low income earners by ensuring no tax is paid on SG contributions. The Government will also retain the co-contribution scheme.
For more details visit this FREE fact sheet on ==> Superannuation - Low Income Earners Government Contribution.
Henry Tax Review - Changes to Super Contributions Cap for Over 50's
You can see more posts here ==> Henry Tax Review Posts
The Henry review of Australia's taxation system was released today (2 May 2010), with changes planed to increase National savings by increasing the concessional (deductible) contributions cap.
The superannuation contribution concessional cap increase is for those nearing retirement. From 1 July 2012, workers aged 50 and over with superannuation balances below $500,000 will be able to make up to $50,000 in annual, concessional superannuation contributions. This measure is expected to benefit 275,000 people.
The current contributions cap is $25,000, reduced in the May 2009 budget from $50,000.
For more details see this FREE fact sheet ==> Superannuation - Concessional Contributions Cap.
The Henry review of Australia's taxation system was released today (2 May 2010), with changes planed to increase National savings by increasing the concessional (deductible) contributions cap.
The superannuation contribution concessional cap increase is for those nearing retirement. From 1 July 2012, workers aged 50 and over with superannuation balances below $500,000 will be able to make up to $50,000 in annual, concessional superannuation contributions. This measure is expected to benefit 275,000 people.
The current contributions cap is $25,000, reduced in the May 2009 budget from $50,000.
For more details see this FREE fact sheet ==> Superannuation - Concessional Contributions Cap.
Henry Tax Review - Employer Super Contribution Increase to 12%
You can see more posts here ==> Henry Tax Review Posts
The Henry review of Australia's taxation system was released today (2 May 2010), at lease in part, with good news for working Australians.
Announced in today's media release is the superannuation guarantee will be gradually increased to 12 per cent as follows:
For more information see the FREE fact sheet ==> Superannuation - Increasing the Superannuation Guarantee Rate to 12%.
"Today's announcements are the biggest reforms to superannuation since the introduction of compulsory superannuation in 1992," Mr Swan said.
"Over the next 10 years, $85 billion will be added to Australia's pool of superannuation savings."
By David Maynard
The Henry review of Australia's taxation system was released today (2 May 2010), at lease in part, with good news for working Australians.
Announced in today's media release is the superannuation guarantee will be gradually increased to 12 per cent as follows:
| Income year | SGC annual rate | Increase from previous year |
| 2009-10 to 2012-13 | 9% | None |
| 2013-14 | 9.25% | 0.25% |
| 2014-15 | 9.50% | 0.25% |
| 2015-16 | 10% | 0.50% |
| 2016-17 | 10.50% | 0.50% |
| 2017-18 | 11% | 0.50% |
| 2018-19 | 11.5% | 0.50% |
| 2019-20 | 12% | 0.50% |
For more information see the FREE fact sheet ==> Superannuation - Increasing the Superannuation Guarantee Rate to 12%.
"Today's announcements are the biggest reforms to superannuation since the introduction of compulsory superannuation in 1992," Mr Swan said.
"Over the next 10 years, $85 billion will be added to Australia's pool of superannuation savings."
By David Maynard
Henry Review - Tax Cuts for Small Businesses to 28%
You can see more posts here ==> Henry Tax Review Posts
The Henry review of Australia's taxation system was released today with good news for small businesses.
Included in today's media release (2 May 2010) is a phased cut in the company tax rate to 28 per cent, intended to assist the competitiveness of all Australian industries. The Government will also seek to cut the company tax rate further, as revenue allows., together with the following measures for small business to commence for the tax year 2012-13 - still two years off yet.
For more details on depreciaon write-off for asses up to $5000, see this FREE fact sheet ==> Small Business Instant Asset Write-off.
These measures will have a significant impact on small business, both in the amount of tax paid and reducing complexities in the depreciation provisions.
Mr Swan said "Today we have announced that the first wave of our agenda is to reform resource, company and small business taxes and superannuation. In the coming months we will have more to say on a number of other areas considered by the review, especially making tax time simpler for everyday Australians, improving incentives to save and improving the governance and transparency of the tax system. This would represent a full second term agenda.
Other recommendations in the review are not government policy. We have called for a mature tax debate and expect the other recommendations to be the subject of much discussion in the coming years.
By David Maynard
The Henry review of Australia's taxation system was released today with good news for small businesses.
Included in today's media release (2 May 2010) is a phased cut in the company tax rate to 28 per cent, intended to assist the competitiveness of all Australian industries. The Government will also seek to cut the company tax rate further, as revenue allows., together with the following measures for small business to commence for the tax year 2012-13 - still two years off yet.
- Small businesses will get a head start on the company tax cut, with the 28 per cent rate applying from 2012‑13.
- Small businesses will benefit from a new instant write‑off for assets worth up to $5,000. Depreciation for other assets will be simplified, reducing complexity, cutting red tape and providing up front tax relief.
For more details on depreciaon write-off for asses up to $5000, see this FREE fact sheet ==> Small Business Instant Asset Write-off.
These measures will have a significant impact on small business, both in the amount of tax paid and reducing complexities in the depreciation provisions.
Mr Swan said "Today we have announced that the first wave of our agenda is to reform resource, company and small business taxes and superannuation. In the coming months we will have more to say on a number of other areas considered by the review, especially making tax time simpler for everyday Australians, improving incentives to save and improving the governance and transparency of the tax system. This would represent a full second term agenda.
Other recommendations in the review are not government policy. We have called for a mature tax debate and expect the other recommendations to be the subject of much discussion in the coming years.
By David Maynard