Treasury
Exemption of Utilities Allowance and Seniors Concession Allowance
| 2005-06 | 2006-07 | 2007-08 | 2008-09 | |
|---|---|---|---|---|
| Australian Taxation Office | - | - | - | - |
The Government has allowed an exemption from income tax for the Utilities Allowance and the Seniors Concession Allowance, with effect from the 2004-05 income year.
The Utilities Allowance of $100 per year for singles and couples is paid to Australians of age pension age who are receiving income support. This allowance is paid in two instalments with each half yearly pension indexation adjustment, with the first instalment having been paid in March 2005.
The Seniors Concession Allowance of $200 per year is paid to self-funded retirees with a Commonwealth Seniors Health Card. This allowance is also paid in two instalments a year, with the first $100 instalment having been paid in December 2004.
This measure was announced on 1 October 2004 as part of the Government’s election commitment in Recognising Senior Australians — Their Needs and Their Carers.
See also the related expense measures titled Utilities Allowance for senior Australians on income support and Seniors Concession Allowances for self-funded retirees who hold a Commonwealth Seniors Health Card in the Family and Community Services portfolio.
Film Licensed Investment Company scheme — two year extension
| 2005-06 | 2006-07 | 2007-08 | 2008-09 | |
|---|---|---|---|---|
| Australian Taxation Office | - | -4.0 | -4.0 | - |
The Government will extend the Film Licensed Investment Company (FLIC) scheme for two years.
The FLIC structure allows investors to spread risk by investing in a slate of film projects whilst receiving a 100 per cent income tax deduction on the funds invested. The extension will allow one licensee to raise concessional capital which will be capped at $10 million in each of the two years.
The concessional capital raising will begin from the date of issue of the licence or 1 July 2005, whichever occurs later, and will conclude on 30 June 2007.
This measure was announced on 4 October 2004 as part of the Government’s election commitment in Strengthening Australian Arts and A World Class Australian Film Industry.
Interaction of the Australian film tax deduction concessions with section 79D foreign loss quarantining
| 2005-06 | 2006-07 | 2007-08 | 2008-09 | |
|---|---|---|---|---|
| Australian Taxation Office | - | - | -3.0 | -3.0 |
The Government will amend the income tax law in regard to the interaction of the foreign loss quarantining rules and the Australian film tax deduction concessions contained in Divisions 10BA and 10B. This will be implemented by removing the quarantining rule for all taxpayers.
This measure was announced on 4 October 2004 as part of the Government’s election commitment in Strengthening Australian Arts and A World Class Australian Film Industry.
See the related revenue measure New international taxation arrangements — removal of foreign loss and foreign tax credit quarantining in the Treasury portfolio in Budget Paper No. 2, Budget Measures 2005-06.
Personal income tax — 30 per cent child care tax rebate
| 2005-06 | 2006-07 | 2007-08 | 2008-09 | |
|---|---|---|---|---|
| Australian Taxation Office | - | -280.0 | -305.0 | -330.0 |
| Related expense ($m) | ||||
| Department of Family and Community Services (a) | 12.9 | 15.6 | 20.9 | 25.6 |
| Australian Taxation Office (a) | 4.1 | 2.7 | 1.6 | 1.6 |
| Total | 17.0 | 18.3 | 22.5 | 27.2 |
- A positive expense estimate indicates a decrease in the fiscal balance.
The Government will provide a non-means tested tax offset of 30 per cent of out-of-pocket child care costs, up to a maximum of $4,000 per child per annum, for those taxpayers who receive Child Care Benefit (CCB) for approved care and meet the CCB work/training/study test, with effect from 1 July 2004. Out‑of‑pocket costs are total child care fees less final CCB entitlement.
The offset is non-refundable, however taxpayers with insufficient tax liability to absorb the whole offset will be able to transfer any unused amount to their spouse.
During the election campaign, the Government announced this policy with effect from 1 January 2005. Subsequently, the Government decided to bring forward the commencement date of this measure so that expenses will be able to be claimed from 1 July 2004. Taxpayers will start receiving the Child Care Tax Rebate in their tax return for the 2005-06 year.
The related expense for the Child Care Tax Rebate includes both an expected increased uptake of CCB, and administration costs, of which $3.2 million funding will be provided by the Government in 2004-05.
This measure was announced on 26 September 2004 as part of the Government’s election commitment in Extra Assistance for Families.
Further information can be found in the press release of 20 December 2004 issued by the Treasurer.
Shorter periods of review for most individuals and businesses in the Simplified Tax System
| 2005-06 | 2006-07 | 2007-08 | 2008-09 | |
|---|---|---|---|---|
| Australian Taxation Office | - | - | -6.5 | -12.5 |
The Government will reduce the amendment period in which the Australian Taxation Office can audit and adjust the tax assessments of most individuals and businesses within the Simplified Tax System from the current four years to just two years.
This measure will take effect from the 2004-05 income year and forms part of the Government’s Response to the recommendations arising from the Review of Self-Assessment for income tax returns reported in the Mid-Year Economic and Fiscal Outlook 2004-05.
This measure was announced on 26 September 2004 as part of the Government’s election commitment Promoting an Enterprise Culture.
Simplified tax system — extension to accrual accounting
| 2005-06 | 2006-07 | 2007-08 | 2008-09 | |
|---|---|---|---|---|
| Australian Taxation Office | -15.0 | -125.0 | -130.0 | -90.5 |
| Related expense ($m) | ||||
| Australian Taxation Office (a) | 0.6 | 0.5 | 0.9 | 0.9 |
- A positive expense estimate indicates a decrease in the fiscal balance.
The Government has removed the requirement that taxpayers in the simplified tax system (STS) must use the STS accounting method. The measure will have effect for income years commencing on or after 1 July 2005.
The STS accounting method broadly involves a cash accounting basis for calculating taxable income.
This measure will enable more businesses to access the benefits of the STS as they will have the flexibility to calculate their taxable income using the accounting method most appropriate to their circumstances.
Legislation giving effect to this change was included in Tax Laws Amendment (2004 Measures No. 7) Act 2005 which received Royal Assent on 1 April 2005.
Funding of $3.1 million over five years (including $0.2 million in 2004-05) will be provided to the Australian Taxation Office to implement and administer the expansion of eligibility for the STS.
This measure was announced on 26 September 2004 as part of the Government’s election commitment in Promoting an Enterprise Culture.
Simplified tax system — introducing a 25 per cent entrepreneurs’ tax offset
| 2005-06 | 2006-07 | 2007-08 | 2008-09 | |
|---|---|---|---|---|
| Australian Taxation Office | - | -400.0 | -390.0 | -370.0 |
| Related expense ($m) | ||||
| Australian Taxation Office (a) | 1.9 | 2.6 | 2.2 | 2.2 |
- A positive expense estimate indicates a decrease in the fiscal balance.
The Government has introduced a 25 per cent entrepreneurs’ tax offset on the income tax liability attributable to the business income of certain small businesses in the simplified tax system (STS). The measure will have effect for income years commencing on or after 1 July 2005.
The full 25 per cent offset will be available for STS businesses that have an annual turnover of $50,000 or less. The offset will phase out for STS businesses with annual turnover between $50,001 and $75,000.
The measure will provide further incentive and encouragement to small businesses, particularly those that set up and operate from home.
Legislation giving effect to the entrepreneurs’ tax offset was included in Tax Laws Amendment (2004 Measures No. 7) Act 2005 which received Royal Assent on 1 April 2005.
Funding of $9.5 million over five years (including $0.6 million in 2004-05) will be provided to the Australian Taxation Office to implement and administer the new 25 per cent entrepreneurs’ tax offset.
This measure was announced on 26 September 2004 as part of the Government’s election commitment in Promoting an Enterprise Culture.
Superannuation — splitting of superannuation contributions
| 2005-06 | 2006-07 | 2007-08 | 2008-09 | |
|---|---|---|---|---|
| Australian Taxation Office | 4.5 | 5.3 | 4.0 | 3.6 |
The Government will allow the splitting of superannuation contributions for contributions made on or after 1 July 2006. In its 2004 election policy document, Super for All and Understanding Money, the Government recommitted to its policy of allowing eligible couples to split their employer and personal superannuation contributions with their spouse.
The provision of splitting to fund members will be voluntary for superannuation funds. This change to the original splitting model, which proposed mandatory provision, addresses concerns expressed by the industry that some funds will be forced to provide splitting where few or no members have an interest in this being utilised.
This measure was announced on 6 October 2004 as part of the Government’s election commitment in Super for All and Understanding Money.
Tax exemption of Commonwealth Trade Learning Scholarships
| 2005-06 | 2006-07 | 2007-08 | 2008-09 | |
|---|---|---|---|---|
| Australian Taxation Office | - | - | - | - |
The Government will allow an exemption from income tax for the Commonwealth Trade Learning Scholarships, with effect from 1 July 2005.
The Commonwealth Trade Learning Scholarships help alleviate the current skill shortages in trade occupations and encourage more young people to take up trade qualifications by easing the financial burden during the early years of an apprenticeship.
The scholarship payments of $500 will be made to eligible new apprentices on successful completion of the first and second years of a new apprenticeship in a skill shortage trade.
This measure was announced on 26 September 2004 as part of the Government’s election commitment in Commonwealth Trade Learning Scholarships.
See also the related expense measure titled Commonwealth Trade Learning Scholarships in the Education, Science and Training portfolio.
Financial Literacy Foundation
| 2005-06 | 2006-07 | 2007-08 | 2008-09 | |
|---|---|---|---|---|
| Department of the Treasury | 5.1 | 5.2 | 5.3 | 5.4 |
The Government will provide additional funding of $21.0 million over four years to establish the Financial Literacy Foundation. This additional allocation supplements funding of $5.0 million in 2004-05 (including $0.8 million in capital funding) provided as part of the Mid-Year Economic and Fiscal Outlook 2004-05.
The Foundation will be responsible for co-ordinating and improving financial education initiatives provided by public, private and community organisations. This includes establishing a website for financial literacy education and information resources, and working with state and territory governments to incorporate financial literacy into school curricula.
This measure was announced on 6 October 2004 as part of the Government election commitment Super For All and Understanding Money.
Financial Literacy Information Programme
| 2005-06 | 2006-07 | 2007-08 | 2008-09 | |
|---|---|---|---|---|
| Department of the Treasury | 8.0 | - | - | - |
The Government will provide the Department of the Treasury with $16.0 million over two years, including $8.0 million in 2004-05, to raise awareness and provide information on consumer financial literacy issues, including superannuation choice. The programme will be administered by the Financial Literacy Foundation.
This measure represents a Government election commitment announced on 6 October 2004 in the Super For All and Understanding Money package.