Tax and super
Making our tax system more sustainable so we can cover the Government’s responsibilities for the next generation
Economic gains of tax reform
The Government’s tax package will boost investment, leading to higher wages and living standards for Australian workers
The Government’s tax and superannuation plan is expected to deliver strong economic benefits to households as a result of higher investment.
Lowering the company tax rate to 25 per cent will significantly increase the attractiveness of investment into Australia.
Australian workers gain from the higher investment as they will be more productive. High productivity will lead to permanent increases in wages, better jobs, increased consumption and higher living standards for Australians.
The economy will be bigger. The tax and superannuation plan is expected to permanently lift the level of GDP by just over one per cent in the long term. This equates to around $16.5 billion of additional production in the Australian economy in 2015–16 dollars.
Modelling of the tax and superannuation plan by Treasury is supported by independent modelling of a company tax cut by KPMG and Independent Economics. They also find that a lower company tax rate would deliver significant gains to Australian workers through more investment and higher productivity.
Details of the modelling will be available at www.treasury.gov.au.
Summary of reforms
| 2015-16 Fiscal ($m) |
2016-17 Fiscal ($m) |
2017-18 Fiscal ($m) |
2018-19 Fiscal ($m) |
2019-20 Fiscal ($m) |
Total FE ($m) | |
|---|---|---|---|---|---|---|
| Superannuation Reform Package | ||||||
| A clear objective for superannuation | - | - | - | - | - | - |
| Introduce a $1.6 million superannuation transfer balance cap | - | -4.4 | 550.0 | 700.0 | 750.0 | 1,995.6 |
| Reforming the taxation of concessional superannuation contributions | - | -2.8 | 499.1 | 797.8 | 1,148.9 | 2,443.0 |
| Introduce a lifetime cap for non-concessional superannuation contributions | .. | 50.0 | 100.0 | 150.0 | 250.0 | 550.0 |
| Introduce a Low Income Superannuation Tax Offset (LISTO) | - | - | -102.8 | -701.1 | -801.1 | -1,605.0 |
| Tax deductions for personal superannuation contributions | - | - | 350.0 | -600.0 | -750.0 | -1,000.0 |
| Allow catch-up concessional superannuation contributions | - | - | - | -100.0 | -250.0 | -350.0 |
| Harmonising contribution rules for those aged 65 to 74 | - | - | -40.0 | -40.0 | -50.0 | -130.0 |
| Improve superannuation balances of low income spouses | - | - | - | -5.0 | -5.0 | -10.0 |
| Removing regulatory barriers to innovation in the creation of retirement income products | - | - | - | - | - | - |
| Strengthen integrity of income streams | - | .. | 190.0 | 220.0 | 230.0 | 640.0 |
| Remove the anti-detriment provision in respect of death benefits from superannuation | - | - | - | 105.0 | 245.0 | 350.0 |
| Totals – Superannuation Reform Package | - | 42.8 | 1,546.3 | 526.7 | 767.8 | 2,883.6 |
| Tax Integrity Package | ||||||
| A new diverted profits tax | - | - | - | 100.0 | 100.0 | 200.0 |
| Implementing the OECD hybrid mismatch arrangement rules | - | - | - | * | * | * |
| Strengthening transfer pricing rules | - | * | * | * | * | * |
| Establishing the Tax Avoidance Taskforce | - | 28.6 | 564.4 | 1,071.2 | 1,395.8 | 3,060.0 |
| Introduce a new Tax Transparency Code | - | - | - | - | - | - |
| Better protecting tax whistleblowers | - | - | - | * | * | * |
| Introduction of a new regime for disclosure of potential tax avoidance | - | - | - | - | - | - |
| Increasing administrative penalties for significant global entities | - | - | * | * | * | * |
| Deferred tax liabilities | - | * | * | * | * | * |
| Broadening the securitised asset measure | - | * | * | * | * | * |
| Totals – Tax Integrity Package | - | 28.6 | 564.4 | 1,171.2 | 1495.8 | 3,260.0 |
| Ten Year Enterprise Tax Plan | ||||||
| Targeted personal income tax relief | - | -800.0 | -950.0 | -1,050.0 | -1,150.0 | -3,950.0 |
| Targeted amendments to Division 7A | - | - | - | - | * | * |
| Business simplification — taxation of financial arrangements — regulation reform | - | - | * | * | * | * |
| Reducing the company tax rate to 25 per cent | - | -400.0 | -500.0 | -800.0 | -950.0 | -2,650.0 |
| Increase the unincorporated small business tax discount | - | - | -150.0 | -150.0 | -150.0 | -450.0 |
| Increase the small business entity turnover threshold | - | -280.0 | -700.0 | -550.0 | -650.0 | -2,180.0 |
| Enhancing access to asset-backed financing | - | - | - | * | * | * |
| Implementing a new suite of collective investment vehicles~ | - | -5.4 | -2.8 | -0.8 | -0.1 | -9.1 |
| Wine Equalisation Tax rebate integrity and wine tourism funding | - | -2.0 | 34.0 | 54.1 | 163.9 | 250.0 |
| Excise refund scheme for distillers | - | - | -3.0 | -3.0 | -3.0 | -9.0 |
| Better targeting the deductible liabilities measure | - | -150.0 | -45.0 | -40.0 | -35.0 | -270.0 |
| Totals – Enterprise Tax Plan | - | -1,637.4 | -2,316.8 | -2,539.7 | -2,774.2 | -9,268.1 |
| Other reforms | ||||||
| More timely guidance on the meaning of tax laws | - | - | - | - | - | - |
| Designated regulatory reform tax bills | - | - | - | - | - | - |
| Measures to improve health outcomes and combat illicit tobacco | - | -2.9 | 690.1 | 1,550.0 | 2,470.0 | 4,707.2 |
| Applying GST to low value goods imported by consumers | - | -4.3 | 6.4 | 6.7 | 7.4 | 16.2 |
| Involving a range of organisations more closely in select tax policy and law design projects | - | - | - | - | - | - |
| Totals – other reforms | - | -7.2 | 696.5 | 1,556.7 | 2,477.4 | 4,723.4 |
| Total of all reforms | - | -1,573.2 | 490.4 | 714.9 | 1,966.8 | 1,598.9 |
~ The revenue impact of this measure is unquantifiable and the profile consists solely of departmental costs, .. not zero but rounded to zero, * unquantifiable