Australian Federal Government Mid-Year Economic and Fiscal Outlook update
- 01 November 2012
The Australian Federal government released its mid-year economic fiscal outlook (MYEFO) on 22 October 2012, somewhat earlier that would be expected.
The MYEFO contained a number of key tax-related announcements, including the following:
- Monthly pay-as-you-go (PAYG) income tax instalments for large companies in Australia will be phased in replacing the current quarterly instalments (providing an estimated saving of $8.3 billion over four years)
- In-house fringe benefits provided under salary sacrifice arrangements will no longer be eligible for concessional FBT treatment. This measure will apply from 22 October 2012 for salary sacrifice arrangements entered into after the announcement, and from 1 April 2014 for salary sacrifice arrangements entered into prior to that time (providing an estimated saving of $445 million over four years).
- The private health insurance rebate formula will change from 1 April 2013. The rebate will be calculated by reference to commercial premiums at that time, and indexed thereafter.
- The ‘Baby Bonus’ is to be reduced to $3,000 per child from 1 July 2013 for second and subsequent children. The payment will remain at $5,000 for the first child (producing estimated savings of $505.9 million over four years).
- The Self Managed Super Fund (SMSF) annual levy will rise from $191 to $259 (a 36% increase).
- Super tax certainty will increase for deceased estates. With effect from 1 July 2012, superannuation fund trustees will be able to dispose of pension assets on a tax-free basis to fund the payment of death benefits.
- Lost superannuation account and unclaimed bank account and life insurance provisions will change to allow the ATO to have earlier access to these funds, and data match lost income to active bank accounts.
A further $390 million in funding will be provided to the ATO for further compliance activities to target profit shifting and high wealth individuals and to focus on non-lodgements in the micro and small business sector (providing an estimated revenue increase of $1.6 billion over four years).