On 31.8.16, the Budget Savings (Omnibus) Bill 2016 was introduced in the House of Reps. It seeks to achieve savings across multiple portfolios to contribute to Budget repair. The Bill would implement measures announced in the 2016-17 Federal Budget and earlier Budget updates. Some of the changes include:
- Single touch payroll reporting – creates a new reporting framework, known as Single Touch Payroll (STP), for substantial employers to automatically provide payroll and superannuation information to the Commissioner of Taxation at the time it is created. Will apply from the first quarter beginning on or after the day the Bill receives Royal Assent.
- Rates of R&D tax offset – reduces the rates of the tax offset available under the R&D tax incentive for the first $100m of eligible expenditure by 1.5 percentage points. The higher (refundable) rate of the tax offset will be reduced from 45% to 43.5% and the lower (non-refundable) rates of the tax offset will be reduced from 40% to 38.5%. Will apply from 1 July 2016.
- Fringe benefits – changes the way in which fringe benefits are treated under the income tests for family assistance and youth income support payments and for other related purposes. The changes are also relevant for a number of income tax provisions.
- Indexation of private health insurance thresholds – pause the income thresholds that determine the tiers for the Medicare Levy Surcharge (MLS) and the Australian Government Rebate (the Rebate) on private health insurance at the 2014-15 rates until 2020-21.
- Indexation of family tax benefit and parental leave thresholds – makes amendments to the family assistance indexation provisions to maintain the higher income free area for family tax benefit (FTB) Part A and the primary earner income limit for FTB Part B for a further 3 years. Under the current law, indexation of these amounts is paused until and including 1 July 2016. These amendments ensure that indexation does not occur on 1 July of 2017, 2018 and 2019. Similarly, amendments are made to ensure that the paid parental leave income limit is not indexed for a further three years, until 1 July 2020. Will apply on the Bill receiving Royal Assent.
- Other changes relate to: minimum repayment income for HELP debts; indexation of higher education support amounts; removal of HECS-HELP benefit; interest charge; debt recovery; parental leave payments; carer allowance; pension means testing for aged care residents; closing carbon tax compensation to new welfare recipients; etc.
[LTN 168, 31/8/16] [Parliamentary website – Bill Tracker] [the Bill] [the EM]