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SPECIAL 2010-11 FEDERAL BUDGET REPORT

Last night the Treasurer, Wayne Swan, delivered the 2010-11 Commonwealth Budget, the third for the Rudd Labour Government.

The Treasurer is forecasting a cash deficit for the 2010-11 year of $40.8 billion; however he is predicting a return to surplus in three years, three years earlier than expected.


Below is a summary of the important outcomes from the Federal Budget which we thought may be of interest and benefit to you.

As usual please don't hesitate to call us if you wish to discuss how any of the points raised in the report specifically affect you or click here to send us an email.

Kind regards,

Martin

Martin Roughley, Director
Spry Roughley Services Pty Limited

50% Savings Discount for Interest Income

From 1 July 2011, the Government will provide individuals with a 50% tax discount on up to $1,000 earned on interest.

Standard Deduction for Work-related Expenses

The Government will provide individual taxpayers with a standard deduction of $500 for work-related expenses and for the cost of managing tax affairs from 1 July 2012.

Medical Expenses Rebate Threshold Raised

From 1 July 2010, the medical expenses rebate threshold will increase from $1,500 to $2,000.

Medicare Levy Thresholds Increased for 2009/10

From the 2009/10 income year, the Medicare levy low-income thresholds will be increased.

Superannuation Co-contribution Matching Rate Permanently Reduced to 100%

The Government has announced that it will seek to permanently set the matching rate for the superannuation co-contribution at 100% and the maximum co-contribution that is payable on an individual's eligible personal non-concessional superannuation contributions at $1,000.

Superannuation Fund Deductions for Terminal Medical Condition Benefits

The Government has announced that it will seek to extend the range of benefits that are deductible by complying superannuation funds and retirement savings account providers to include terminal medical condition (TMC) benefits.

Look-through Treatment for Earnout Arrangements

All payments under a qualifying ‘earnout’ arrangement will be treated as relating to the underlying business asset.

Increased Funding to Counter Cash Economy

The Government will provide $107.9 million over four years to the Tax Office, to address small business operators who use cash transactions to avoid tax.

GST Compliance Program — funding for the Tax Office

The Government states that it will provide $337.5 million over four years (from the 2010/11 to the 2013/14 income years) to the Tax Office.