MYEFO 2013-14 – a slowing economy is the key issue.
Treasurer Joe Hockey and Minister for Finance Mathias Cormann released the Coalition’s MYEFO for the 2013-14 financial year which predicts a worsening economic outlook for the Federal budget, with slower growth and worsening unemployment.
The MYEFO predicts a lowering of receipts from wages and company taxes on the back of lower minerals prices, with a trend to higher deficits than previously predicted.
There were basically no new significant tax measures announced in the MYEFO 2013-14, however previously announced Coalition policy proposals were confirmed, as outlined below.
The political ground is clearly being prepared for some potentially unpopular tax choices to be made in the next full budget due in May 2014.
The MYEFO and related recent announcements confirm measures which are not going ahead which include:
- companies loss carry-back proposals
- cap on self education expenses deduction
- removal of car expenses statutory formula for FBT
- tax on superannuation pensions earning over $100,000
- Quarterly credits for the R&D tax incentive
- Bad debts – ensuring consistent treatment in related party financing
- Foreign accruals regime
- “better targeting” of not-for-profit tax concessions
Measures that are to proceed or are confirmed include:
- reduction of small business instant asset and motor vehicle depreciation write-off limits from 1 January 2014
- removal of school kids bonus from 1 July 2014
- Low Income Superannuation Contribution (“LISC”) is abolished from 1 July 2013
- Re-phasing (deferral by 2 years) of superannuation guarantee percentage increases which were schedule from 1 July 2015
- changes to the thin capitalisation provisions
- CGT treatment of earn-out arrangements
- reverse charge GST mechanism for the sale of a going concern or of farm land
- income tax treatment of instalment warrants
- GST and cross-border transactions – “connected with Australia” rules
- Loss recoupment rules – multiple classes of shares
- The MYEFO 2013-14 document is downloadable here.
- All MYEFO 2013-14 related resources at budget.gov.au
- Treasurer Joe Hockey warns of ‘tough decisions ahead’