14 May 10 Preamble - Friday, 14 May 2010This week saw the release of the 2010-11 Federal Budget by Treasurer Wayne Swan. We issued a press release on Budget night outlining our view that the Budget takes a positive step towards simplifying tax time for millions of Australians.
The optional standard deduction of $500 in lieu of claiming work-related expenses and the cost of managing tax affairs from 1 July 2012, increasing to $1,000 from 1 July 2013, is a long overdue measure that's good for compliance and reduces costs by making the system simpler. The Government's adoption of this Henry Review recommendation was widely expected and is a great step towards fairer and simpler tax returns for millions of Australians.
We also welcomed the Government's announcement of a new tax incentive that halves the tax paid on up to $1,000 of interest income from a range of savings products from 1 July 2011.
Another positive Budget measure is the clarification of the tax treatment of earnout arrangements used to structure the sale of a business or asset to manage uncertainty about the value of the business or asset. We had called for this welcome clarification but strongly believe that the application date should be brought forward from the date announced in the Budget.
The Taxation Institute had a great win in the Budget with the Government announcing various reforms to the GST laws. These significant improvements in the law are a direct result of the hard work and dedication of our GST sub-committee, chaired by Gina Lazanas FTIA (Balazs Lazanas & Welch), in drafting submissions and discussing the policy changes with the Government.
Meanwhile, the analysis of the recommendations in the Henry Review continues in the Institute specialist sub-committees and we are participating in the Government's consultation panel on the new resource rent tax.
Robert Jeremenko FTIA