“A good budget for the times, but there is more long-term work to be done.” – Peter Godber, CTA, The Tax Institute President
SYDNEY, 6 October 2020: “Overall, this is a budget that does a lot of good for Australian businesses and their employees. There were some short-term tax changes which will make an impact on our economy. Hopefully this is the appetiser for the main course of more holistic and long-term tax reform measures,” said Peter Godber, CTA, The Tax Institute President.
“There is still a considerable amount of work to be done in creating a simple, equitable tax system which serves Australians. To be truly meaningful, tax reform must be holistic and forward thinking,” said Peter.
“There were a number of welcome tax measures announced in the 2020-21 Federal Budget but many of those are minor adjustments to the current tax system. So while this is a step in the right direction, we would have liked to see more comprehensive change, including making some of these temporary measures a permanent feature,” said The Tax Institute Director of Tax Policy and Technical, Andrew Mills, CTA (Life).
Some of the most significant measures announced in the Budget include:
“Bringing forward the Stage 2 personal income tax cuts is certainly a welcome measure. This will put cash in pockets as soon as the ATO puts out new tax scales. The Government has been generous in keeping the low and middle income tax offset for the current year, which will be payable next year on lodging tax returns,” Mills said.
“It’s great to see that 99% of businesses will have access to an increase and extension of the instant asset write-off of depreciable assets,” Mills said. “We strongly believe that while the measure announced tonight is quite generous, write-offs for small and medium businesses should be a permanent feature of our system, rather than a temporary measure extended year to year.”
“The loss carry-back concession is very good news. However, while the measure is temporary, this really should be a permanent feature of our tax system. It’s as simple as that,” said Mills.
“The increase in the small business turnover threshold, which allows businesses with a turnover of less than $50 million to access tax concessions that are currently available to business under $10 million turnover is great for mid-sized businesses that were struggling to cope with the financial impact of COVID-19. A welcome measure,” Mills said.