The Treasurer on Mon 22.10.2012, released the Mid-Year Economic and Fiscal Outlook 2012-13 (MYEFO) revising down the expected Budget underlying cash surplus to id=”mce_marker”.1bn for 2012-13 (down from id=”mce_marker”.5bn estimated in the May 2012 Budget). Mr Swan said the reduction in the estimated surplus has been driven by a further write-down in tax receipts of $4bn in 2012-13 alone (and almost $22bn over the forward estimates), almost all from company tax and resource rent taxes. The Treasurer said the Government will deliver id=”mce_marker”6.4bn in new savings over the forward estimates.
Key new tax and superannuation measures announced by the Government include:
- – monthly PAYG instalments for large companiesa phased introduction of monthly PAYG instalments for large companies in Australia over 3 years:
- from 1 January 2014, for companies with a turnover of id=”mce_marker”bn or more (around 350 companies);
- from 1 January 2015, for companies with a turnover of id=”mce_marker”00m or more (around 2,500 companies); and
- from 1 January 2016, for companies with a turnover of $20m or more (around 10,500 companies). The Government said it proposes to issue a consultation paper “early next year”;
- ‘in-house fringe benefits’ concessions narrowed – concessional treatment will be removed for in-house fringe benefits if they are accessed through a salary sacrifice arrangement. This proposal will apply to salary sacrifice arrangements entered into from Mon 22.10.2012, and from 1 April 2014 for salary sacrifice arrangements entered into prior to Mon 22.10.2012. Under the changes, the taxable value of in-house fringe benefits provided through a salary sacrifice arrangement will be either the lowest price at which an identical benefit is sold to the public or under an arm’s length transaction, depending on the nature of the benefit;
- Private Health Insurance (PHI) rebate – from 1 April 2014, the premium to which the rebate is applied will move in line with CPI or the commercial premium increase, whichever is lower. However, the rebate as it currently applies will remain unchanged;
- SuperStream start date deferred – the start date for the proposed e-commerce data and payment standards for superannuation contributions and rollovers for superannuation trustees will be deferred from 1 July 2013 to 1 January 2014. However, the Government said it remains committed to mandating electronic contributions from medium and large employers from 1 July 2014;
- superannuation income streams exempt intra-fund after death of a member – from 1 July 2012, the Government will amend the law to allow the tax exemption for earnings on assets supporting superannuation income streams to continue following the death of a fund member in the pension phase until the deceased member’s benefits have been paid out of the fund. This proposed continuation of the exempt current pension income (ECPI) provisions beyond the death of a member will be subject to the existing requirement for the benefits of a deceased member to be paid out of the fund as soon as practicable following the member’s death;
- superannuation proportioning rule – the Government will ensure that the proportioning rule in s 307-125 of the ITAA 1997 does not apply to transactions that are beyond the control of individual members. The proposed changes seek to provide greater certainty around superannuation fund mergers and certain transactions in response to the Stronger Super reforms [the object of s307-125 is to ensure that the taxable component and the tax-free component of a superannuation benefit are kept in proportion];
- SMSF levy – will be increased to $259pa from 2013-14 (up from id=”mce_marker”91 in 2012-13) and levied and collected from SMSFs in the same year of income. The change in the timing of the collection of the SMSF levy will be phased in over the 2 years 2013-14 and 2014-15;
- Lost & small superannuation balances transferred to Tax Office – from 31 December 2012, the account balance threshold below which inactive superannuation accounts, and accounts of uncontactable members, are required to be transferred to the Tax Office will be increased to $2,000 (from $200) and the period of inactivity before an account of an unidentifiable member is required to be transferred to the ATO will be reduced to 12 months (from 5 years). The Tax Office will also be given additional funding to use its data matching resources to match lost accounts with active accounts;
- interest paid on lost superannuation monies – from 1 July 2013, for the first time, the Government will pay interest at the rate of CPI inflation on all unclaimed superannuation monies reclaimed from the Tax Office and unclaimed monies reclaimed from ASIC;
- baby bonus reduced – the baby bonus rate will be reduced from $5,000 to $3,000 for second and subsequent children from 1 July 2013;
- visa application charges increase – a number of Visa Application Charges will increase from 1 January 2013. The changes to visa application charges will apply to skilled graduates, partners, working holiday makers and temporary overseas workers; and
- Extra funding for ATO compliance activities – provision of $390m funding to the ATO for further compliance activities to continue to target profit shifting and high wealth individuals and to focus on outstanding income tax lodgments in the micro and small business segments.
Source: Treasurer’s media releases Nos 099 and 100, 22 October 2012
[LTN 204, 22/10]