With speculation rife in the media as to what’s to come in the Budget and with tax reform, we [Asteron Life] attempt to prepare you for what you can expect and look at the rumours.
“have to drive growth and jobs, have to be fair and the complexity associated with them has to be justified in terms of a productivity output.”
The government, in its response to the Murray Financial System Inquiry, pledged to develop and introduce legislation to enshrine the objective of the superannuation system by the end of 2016. The Treasurer, Scott Morrison, has said that the purpose of superannuation should be to reduce pressure on the age pension and the Government is intent on super not being used as means of building tax free inheritance pools.
What appears to be off the table is the increase in the GST to 15% and/or broadening of the base. As a result, changes to the following are rumoured or possible:
The Government’s challenge is to ensure that any reforms have the dual effect of increasing productivity and encouraging growth. There’s no doubt that there are some difficult decisions ahead.
The government is working to release a tax statement in early April that will outline its plans to fund income tax cuts primarily via changes to superannuation, negative gearing and workplace expenses.
The Federal Budget in May is likely to include concrete serious options for tax reform and will effectively be the white paper on tax reform. It is likely that further announcements will be made before then. We will provide further analysis as announcements are made.
Source: Asteron Life March 2016
This information is current as at March 2016 but may be subject to change.
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