The Government Fri 2.8.2013, released its Economic Statement (August 2013) ahead of the upcoming Federal election. The Government announced that it is “on track” to achieve a modest budget surplus of $4bn in 2016-17. With the forecast moderate slowdown in the economy, the Government said it has made the decision to allow the tax write-downs to flow through to the budget balance in 2013-14 and 2014-15, resulting in an expected deficit on $30.1bn in 2013-14 and $24bn in 2014-15. The Government says it has made id=”mce_marker”7.4bn of savings decisions to provide a pathway to expected surplus in 2016-17.
Preliminary estimates indicate that the underlying cash deficit in 2012-13 will be around id=”mce_marker”8.8bn (around 1.2% of GDP), which the Government says suggests a slightly improved outcome from previous estimates. It said the final results for 2012-13 will be determined following the finalisation of audit cleared financial statements and will be published in the 2012-13 Final Budget Outcome by 30 September 2013.
Key announcements include:
- The statement confirms the Government’s announcement on 16 July 2013 (as part of the announcement to bring forward the emissions trading scheme by one year to 1 July 2014) to remove the statutory formula method for both salary-sacrificed and employer-provided car fringe benefits for new contracts entered into after the announcement, with effect from 1 April 2014.
- The introduction of the $2,000 cap on work-related education expense deductions will be deferred until 1 July 2015 to allow for further consultation.
- A dedicated Financial Stability Fund will be established to help meet any future cost of the Financial Claims Scheme (FCS) as well as the cost of other resolution activities that protect depositors. According to the Government, the fund will build gradually over time to a target size of 0.5% of total deposits protected by the FCS.
- The threshold below which small inactive super accounts (including inactive accounts of uncontactable members) are required to be transferred to the ATO will be increased from $2,000 to $4,000 from 31 December 2015, and then to $6,000 from 31 December 2016.
- As announced Thur 1.8.2013, the Government proposes to introduce staged 12.5% increases in tobacco excise over 4-years.
- The ATO will be provided with an additional $99m over 4-years to address the levels of unpaid tax and super in the community.
Source: Treasurer’s media release No 016, 2 August 2013
[LTN 148, 2/8/13]