Making the tough choices to ensure sustainability

Tough decisions have been taken to make the budget sustainable

The Government has had a hard look at benefits that are delivered through the taxation system to ensure that tax expenditures are cost effective. The Budget contains a number of changes to improve the integrity of the taxation system and make sure that everyone pays their fair share of tax. These include:

• tightening the rules applying to non‑commercial businesses losses to prevent high income individuals deducting losses from activities that are unlikely to make a profit against their salary or other income.

These activities are often more like hobbies or lifestyle choices

• better targeting the tax exemption for Australians' foreign employment income to employees such as aid and defence workers and those whose work is declared to be in Australia's national interest
• better targeting the concessions for employee share schemes
• reducing the concessional superannuation contributions caps
• extending the tax file number withholding arrangements to distributions by trusts with fewer than 20 beneficiaries

• ensuring shareholders in private companies and their associates are taxed when they use company assets for private purposes.

These changes will improve the integrity of the taxation system by helping to ensure that everyone pays their fair share of tax.

The changes will increase taxation revenue by around $4.6 billion over the forward estimates period.