Friday of Budget week has arrived, so that means we have all had a couple of days to examine the announcements and listen to the expansive commentary being provided by the Government, the Opposition and the media – or perhaps that’s something to glance at over the weekend.
In any event, members will have received the special Budget Edition of TaxVine on Tuesday night, which contains a technical summary of the tax measures prepared by CCH and initial comments from The Tax Institute. If you missed it, you can access it here.
President, Peter Murray FTIA, and I emerged from the Budget ‘lock-up’ on Tuesday evening and issued The Tax Institute’s Budget media release – please click here for a copy.
In a significant win for The Tax Institute, the Government listened to our long-held concerns and has introduced some relief from excess superannuation contributions tax. Allowing refunds of excess concessional superannuation contributions of up to $10,000 for first time breaches from 1 July 2011, is a welcome move. Although it won’t address all instances of excess contributions tax, it’s a positive step from the Government to introduce some flexibility. Some 80 per cent of breaches of the concessional caps are for amounts less than $10,000.
The Tax Institute has been a strong advocate for reforming the excess superannuation contribution laws and we will be actively involved in the Government consultation on implementing this measure.
The details of this measure were some of the very few that were not pre-released by the Government to the media in the lead up to Budget night.
With a stronger fiscal position predicted for 2012-13, there is a greater prospect of significant tax reform, which is vital to ensure that Australia is well positioned for the challenges of the next 40 years. However, the Government needs to start the heavy-lifting now, to ensure the tax reform debate continues and that there is a medium-term plan for reform in the coming years. The Tax Forum/Summit in October this year is just one aspect of a much longer debate. Thanks to the Budget papers, we also know how much this two day event is costing us: $900,000 – I don’t expect there will be caviar served with the sandwiches, but for the price I hope we get some solid outcomes and a process for taking the tax reform agenda forward.
Robert Jeremenko FTIA