2012 Federal Budget

Last night Treasurer Wayne Swan handed down the latest Federal Budget, one that is projected to take the government from a $44.4 billion deficit to a $1.5 billion surplus.

The key points from the budget are these;

Business

• Company tax rate remains at 30%, with the proposed 1% reduction scrapped
• Companies allowed to "carry-back" tax losses against profits of the prior year.  This is in relation to losses made in the 2013 year and beyond up to a maximum of $1m (does not apply to losses made before 1 July 2012)
• Changes to LAFHA concessions
• $1,000 bonus to companies for each worker they hire aged over 50 for at least three months
• Extended GST compliance program checking under-reporting of GST and non-lodgement of returns

Personal

• Slight increase in the low income Medicare Levy threshold
• Scrapping of the 50% discount of tax on the first $1,000 of interest income
• Scrapping of the standard tax deduction (or "tick and flick") tax return proposal
• Net Medical Expenses Offset changes for individual and families with incomes over $84k and $168k respectively, with the threshold increased from $2,000 to $5,000 and the rate is 15% instead of 20%
• Schoolkids bonus payment replaces the Education Tax Refund, with payment of $820 for high school students and $410 for primary students if the family qualifies for Family Tax Benefit Part A
• Medicare Levy surcharge changes and income testing the eligibility for the private health insurance rebate
• Increase to Family Tax Benefit Part A of about $300 per family
• Cutbacks in parenting payments, shifting it to NewStart (dole) after youngest child turns 8
• Non-residents no longer can qualify for the 50% capital gains tax discount

Superannuation

• From 1 July 2012 contributions for taxpayers earning $300k or more will be taxed at 30% rather than 15%
• Increase in contributions cap for those over 50 and with a super balance under $500k has been deferred by 2 years (caps ar $25k if under 50 and $50k if 50 and over regardless of balance in super)