With the assistance of the Palmer United Party the Mining Tax repeal legislation has now finally been approved by both Houses of parliament.
For the Government the price of approval came in the form of some compromise in measures which were linked to the Mining Tax when it was introduced, and which the Government wanted to wind back to help with the budget bottom line.
For details of the amending legislation and explanatory memoranda, see Mining Tax repeal legislation.
The mining tax itself ceases with effect from 1 October 2014.
Key measures approved in the final deal to pass the legislation include:
School Kids Bonus
The removal of the School Kids Bonus previously announced was to have taken effect from the date of amending legislation. The removal timing will now be income tested such that:
- for those on incomes over $100,000, the School Kids Bonus will take effect from the date of Royal Assent, i.e. more or less immediate
- for those on incomes under $100,000 the removal will be deferred until 31 December 2016
“Income” for these purposes is “Adjusted Taxable Income”
Increases in the super guarantee percentage rate have (again!) been re-phased – the current percentage rate of 9.5% will now apply until 30 June 2020. From 1 July 2020 the percentage rate will increase by 0.5% each year until reaching 12% for the year ended 30 June 2026. See Superannuation Guarantee
Income Support Bonus
The Income Support Bonus is an indexed, non-means tested payment paid twice a year to eligible social security recipients to assist with unanticipated expenses. The removal of the income support bonus was previously intended to take immediate effect, but has now been deferred until 31 December 2016. For further information about eligibility and payment rates see Department of Human Services
Small business instant asset write-off
As previously announced the removal of the $5,000 instant asset write-off takes effect from 1 January 2014. In a television interview on 3 September 2014 the Treasurer has said he will consult with small business and make an announcement to confirm the timing. See also Depreciation
Low Income Super Contribution (“LISC”)
The removal of LISC as previously announced is to be deferred and will now take effect from 1 July 2017. See LISC
Companies – Loss carry back
The loss carry-back and associated transitional provisions are now repealed, (with effect from 1 July 2013) and the Tax Office has previously announced that amendments without penalty will be automatically processed to reverse the tax assessments of previous claims.
Certain technical tax law improvements which were part of the original loss carry-back legislation have been retained.
Geothermal expenditure deduction
The amendments repeal the two ways in which geothermal exploration or prospecting expenditure can be immediately deducted. Firstly, geothermal exploration rights and information are no longer defined as a depreciating asset. Secondly, expenditure on exploration or prospecting for geothermal energy resources is no longer immediately deductible under the capital allowance provisions. The repeal measures are effective from 1 July 2014.