This Budget 2013 page has information about the Australian Federal budget for 2013-14. With 2013 being an election year and the government acknowledging a funding deficit, this budget is of special interest. The Federal Treasurer’s budget speech was delivered to the House of Representatives on Tuesday 14 May 2013 at 7.30pm Australian Eastern time (AEST). At 7.30pm AEST on Thursday 16th May 2013, the Leader of the Opposition delivered his speech in reply.
Budget measures released or canvassed in the weeks preceding the budegt include:
- Superannuation amendments to introduce a tax on higher income earners and a number of other measures – see Superannuation changes announced 5 April 2013
- Due to the lower than expected collections of the mining tax, the planned personal tax reductions in 2015-16 are to be removed.
- Medicare levy is to increase to 2% from 1 July 2014 in connection with NDIS funding arrangements – Media release
- Planned increases in the Family Tax Benefit are being dumped
- Public service jobs will go under plans for a $580 million cut to the public service to take place over four years.
- Delayed foreign aid spending targets – ABC online
- $300 million is to be allocated to help those on the Newstart, Parenting Payment and Widow, Sickness or Partner Allowance – ABC online
Budget summary for individuals
New Tax Measures – Budget 2013-14 speech 14 May 2013
- From 1 March 2014 the Baby Bonus will be abolished, and Family Tax Benefit Part A payments will be increased 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 and subsequent children.
- The additional FTB Part A will be paid as an initial payment of $500, with the remainder to be paid in seven fortnightly instalments.
- The previously announced increase in Family Tax Benefit Part A from 1 July 2013 will now not proceed.
- Net medical expenses tax offset to be phased out: From 1 July 2013, those taxpayers who claimed the NME tax offset in the 2012/13 income year will continue to be eligible for the offset in the 2013/14 income year if they have eligible out-of-pocket medical expenses above the relevant thresholds. Similarly, those who claim the offset in the 2013/14 income year will continue to be eligible in the 2014/15 year. The medical expenses tax offset will continue to be available for taxpayers for out-of-pocket medical expenses relating to disability aids, attendant care or aged care expenses until 1 July 2019 when DisabilityCare Australia becomes fully operational and aged care reforms have been in place for several years.
- Medicare levy low income thresholds for 2012/13 have been confirmed for individuals at $20,542, or $32,279 for SAPTO pensioner, and for families will increase to $33,693 with the additional threshold amount of $3,094 for each dependent child or student.
- Dividend washing to be prevented from 1 July 2013 for investors with over $5,000 in franking credits. What is “Dividend Washing”?
- Miners lose tax concessions: Mining rights and information to be excluded from immediate exploration deduction and replaced with depreciation over 15 years or effective life. Applies after 7.30pm (AEST) on 14 May 2013 unless pre-existing contracts, and does not affect:
- mining rights and information from a government authority
- self-incurred costs and
- mining rights acquired by a farmee under a recognised “farm-in, farm-out” arrangement.
- Certain loopholes in the tax consolidation regime will be closed from 14 May 2013, following recommendations provided by the Board of Taxation
- Non-Residents Capital Gains Tax:
- Amendments will be made to the principal asset test to ensure that property is taxable if disposed of by a foreign resident with effect from 7.30pm (AEST) on 14 May 2014, and transactions within a tax consolidated group will be ignored.
- Withholding tax: From 1 July 2016 a 10% non-final withholding tax will apply to the disposal by foreign residents of certain taxable Australian property. The purchaser will be required to send 10% of the sale proceeds to the Tax Office. This measure will not apply to residential property under $2.5 million or to Australian residents.
- The thin capitalisation and other rules governing interest deductibility by multinational entities are being tightened with effect from 1 July 2014
- New and previously announced measures in the 2013-14 Federal Budget – Minister Swan media release
- CCH Budget Night Report 2013 (pdf) from www.cch.com.au
- The full budget papers can be downloaded from budget.gov.au