# Budget 2013



## Garpal Gumnut (13 May 2013)

I had waited for someone else to commence a thread on the budget, being delivered tomorrow night, in less than 24 hours.

I am unsure whether the lack of such a thread is due to a general malaise in our ASF community or to challenged moderation.

I am a bit beyond trying to stimulate people to think or act in their own interest.

Any ideas?

gg


----------



## chops_a_must (13 May 2013)

You could always pay people to have posts.

You could call it the "post bonus".


----------



## DB008 (13 May 2013)

The ABC's 'The Drum'......

Economic comparisons are useless without context
http://www.abc.net.au/news/2013-05-07/alberici-economic-comparisons/4672166


----------



## Tyler Durden (13 May 2013)

I have been meaning to start a thread about the budget, but might as well ask here...

What one thing would you do to try to bring the budget into surplus?

For me, I would change the laws so that anyone who gets caught ripping off Centrelink is no longer able to get it thereafter. Ever.


----------



## Econ Turbo (13 May 2013)

I can see a decade of higher taxes and lower spending ahead for Australia. The mining boom will peak and with its money soon a thing of the past...


----------



## FlyingFox (13 May 2013)

chops_a_must said:


> You could always pay people to have posts.
> 
> You could call it the "post bonus".




LOL. You and GG will be rolling in it then ...


----------



## Garpal Gumnut (13 May 2013)

I really think we should just have an election.

Anyone who takes the projections tomorrow night from Swan or Gillard, as being true, attainable or valid, needs their head read.

What a waste of trees.

gg


----------



## sails (13 May 2013)

Tyler Durden said:


> I have been meaning to start a thread about the budget, but might as well ask here...
> 
> What one thing would you do to try to bring the budget into surplus?
> 
> For me, I would change the laws so that anyone who gets caught ripping off Centrelink is no longer able to get it thereafter. Ever.





Would that include the boat arrivals who may not be genuine refugees?  That would likely be a massive saving.


----------



## FlyingFox (13 May 2013)

DB008 said:


> The ABC's 'The Drum'......
> 
> Economic comparisons are useless without context
> http://www.abc.net.au/news/2013-05-07/alberici-economic-comparisons/4672166




Finally, an article that does away with the name calling and picking sides to actually deliver the facts ... very interesting.


----------



## Garpal Gumnut (13 May 2013)

FlyingFox said:


> Finally, an article that does away with the name calling and picking sides to actually deliver the facts ... very interesting.




If it's from the ABC, it's biased.

I'll have a look though.

But the ABC is biased.

gg


----------



## Garpal Gumnut (13 May 2013)

FlyingFox said:


> LOL. You and GG will be rolling in it then ...




Myself and chops have started a company called 

postcoin

Only muppets may apply, as in bitcoin.

gg


----------



## sptrawler (13 May 2013)

Garpal Gumnut said:


> Myself and chops have started a company called
> 
> postcoin
> 
> ...




Is that the coin with a deranged swan on one side and a duck on the other side?


----------



## Garpal Gumnut (13 May 2013)

sptrawler said:


> Is that the coin with a deranged swan on one side and a duck on the other side?




It's called the holey platypus.

gg


----------



## sptrawler (13 May 2013)

GG, I just hope the coalition force an early election.
Labor are just forcing a forward spending agenda, without any regard for funding. 
Wow, as if that is any different to what they've being doing for the last 5 years.

The sooner this lot is thrown out the better.IMO


----------



## medicowallet (14 May 2013)

sptrawler said:


> GG, I just hope the coalition force an early election.
> Labor are just forcing a forward spending agenda, without any regard for funding.
> Wow, as if that is any different to what they've being doing for the last 5 years.
> 
> The sooner this lot is thrown out the better.IMO




To lock in large spending items, especially at a time when it is getting more difficult to see a decade into the future... well....   I think that if it is allowed, then Oakshott and Windsor should take the blame for any forthcoming pain in relation to the poison pills that labor includes in it's parting shot.



MW


----------



## qldfrog (14 May 2013)

Garpal Gumnut said:


> If it's from the ABC, it's biased.
> 
> I'll have a look though.
> 
> ...



I am afraid it is my opinion too 
So anything on the ABC which is not locl news about squashed dogs and weather reports, I just bypass and do not waste my time reading.
Probably sad as I am sure, some article may be ok, but life is too short to track the 20% which might be proper information vs bias.
I read the AFR and do believe to have a fair feed of real economical/political news..and it is not pretty!


----------



## qldfrog (14 May 2013)

BTW and probably linked to budget and overall mess even foreigner start to discover, anyone detected that we reached parity with the USD now?(I know, 1,004 is not yet parity but 
so from 1.06 to 1 in only a few months: I like my citibank USD currency account!!!


----------



## Calliope (14 May 2013)

Tonight Wayne Swan will tell the truth;

http://www.heraldsun.com.au/opinion...ayne-swans-world/story-e6frfhqf-1226641521149


----------



## Julia (14 May 2013)

That article is available to subscribers only.  Copy and paste of the heading still blocks it.

I understand Mr Swan is going to this evening provide the ten year plan for how the NDIS and Gonski will be funded.


----------



## FlyingFox (14 May 2013)

Garpal Gumnut said:


> If it's from the ABC, it's biased.
> 
> I'll have a look though.
> 
> ...






qldfrog said:


> I am afraid it is my opinion too
> So anything on the ABC which is not locl news about squashed dogs and weather reports, I just bypass and do not waste my time reading.
> Probably sad as I am sure, some article may be ok, but life is too short to track the 20% which might be proper information vs bias.
> I read the AFR and do believe to have a fair feed of real economical/political news..and it is not pretty!




Perhaps, but I do urge you to have a look if you have time. It points out some interesting facts about the past few budgets and possible dire consequences for future ones...


----------



## MrBurns (14 May 2013)

The budget wont be worth the paper it's written on.

Composed and delivered by total losers, liars cheats and petty crims.


----------



## Intrinsic Value (14 May 2013)

I am looking into my crystal ball and seeing wait oh yes a new tax or more tax increases. Now there that wasnt hard was it?

Time they started really seriously thinking about not thinking about a new tax or tax increases and more like spending custs especially to the 316 billion on social security of which half that amount is gobbled up in administrative costs.


----------



## Calliope (14 May 2013)

Swan's swansong tonight reminded me of Hitler in his bunker in the closing stages of the war, still ranting about the 1000 year Reich.


----------



## sptrawler (14 May 2013)

I'm looking forward to the new budget commitments to 'clean technology jobs' that the carbon tax was introduced for.
This was going to put us into the era of world leading, cutting edge technology jobs.lol,lol lol

Turns out it hasn't shut down the' dirty brown coal' power stations.
It has put up the price of electricity.
It has shut down industry.
It hasn't created any new technology jobs.
It has increased tax, but it hasn't helped.
The goon show.


----------



## Calliope (14 May 2013)

"Swans sing before they die; ’twere no bad thing
Did certain persons die before they sing."

Coleridge


----------



## dutchie (14 May 2013)

We have to give Swan credit where credit is due - it was close to a surplus.


----------



## Econ Turbo (14 May 2013)

Its hard to blame but treasury really ****ed up the forecasts..... They really need to go more conservative and assume the carbon tax will collect next to nothing (Europe carbon trading scheme has collapsed) and the mining tax will collect nothing (commodity prices have fallen to levels below the collectable level).

Two failed policies by Labor?


----------



## ROE (14 May 2013)

Superfund, trust, sole traders now has to pay monthly tax .....that sound like fun


----------



## Garpal Gumnut (14 May 2013)

I have been through all the figures, cant and electioneering.

Swan has managed to screw the vulnerable, the productive and the powerless in one sweep.

The squeezed lemon looks from the ALP Frontbench and the "Two Sheilas" said it all.

Roll on the election.

What a waste of two parliaments in a nation eager to prosper and maintain resilience and the fair go.

gg


----------



## sptrawler (14 May 2013)

ROE said:


> Superfund, trust, sole traders now has to pay monthly tax .....that sound like fun




What is that one about, Roe?


----------



## Garpal Gumnut (14 May 2013)

sptrawler said:


> What is that one about, Roe?





Typical ALP.

Putting extra accountancy costs on savers.

I will now have to pay x 12 times my costs to my accountant for my SMSF return.

Idiots.

gg


----------



## Julia (14 May 2013)

ROE said:


> Superfund, trust, sole traders now has to pay monthly tax .....that sound like fun



That wasn't my understanding of what the Treasurer said, with respect to SMSFs.  I may have misinterpreted what I heard where I didn't hear SMSFs mentioned at all.  I didn't listen to all of his speech, so if you could give us a link to the advice that SMSFs are going to have to provide monthly tax returns, that would be appreciated.

It sounds completely unbelievable and absolutely impractical to me.


----------



## ROE (14 May 2013)

Julia said:


> That wasn't my understanding of what the Treasurer said, with respect to SMSFs.  I may have misinterpreted what I heard where I didn't hear SMSFs mentioned at all.  I didn't listen to all of his speech, so if you could give us a link to the advice that SMSFs are going to have to provide monthly tax returns, that would be appreciated.
> 
> It sounds completely unbelievable and absolutely impractical to me.




I got it from abc24 no details just

Superfunds, family trust, sole traders and large investors pay monthly tax...
I am sure afr will have details tomorrow


----------



## Garpal Gumnut (14 May 2013)

ROE said:


> Superfund, trust, sole traders now has to pay monthly tax .....that sound like fun




ALP guys are either lawyers or Union hacks.

Never been in business,

Monthly tax returns is the abolition of SMSFs by stealth.

Muppets.

gg


----------



## sptrawler (14 May 2013)

Here is an interesting early take on the budget.

http://www.smh.com.au/business/fede...ics-rather-than-economics-20130514-2jknw.html


----------



## ROE (14 May 2013)

Let compared ALP to average Joe..

Joe earns $100,000 under Howard years, he spend 80k and has 20k left over

Then Aunty Gillard and Uncle Swan came for a visit
he feel empowered and start spending 100k a year
He get pay increase of 3-6%  a year but Uncle Swan think he can get 10% a year..
So why settle for 3-6%

So instead of spend 80k to 100k a year he went and spend 120k a year and said
I am so good even with that much money spent I will still have some left over
And if I cant do it I am not fit to govern my own finance....

Then the world sneeze and he only get 103k a year, still better than under Howard years, 
but he in 17k in debt at the end of the year and he blames he Has one in 50 years salary cut -
some other thing outside his control

But all along it is within his control to spend less than 100k 

And that is how life works under labor....


----------



## sptrawler (14 May 2013)

Garpal Gumnut said:


> ALP guys are either lawyers or Union hacks.
> 
> Never been in business,
> 
> ...




The good old union hacks, on industry fund boards, would have pushed for that. 
Also I suppose Gillard, Swan and the rest that get thrown out will end up on industry fund boards, so it is self serving.
Which seems to be the way the goon show operate.

The tax dept will be underwater, if this was introduced, just another half @rsed policy going nowhere.
This is the dumbest bunch ever.
I see they are going to reward retirees who downsize, what about the responsible ones who have allready downsized.lol,lol,lol
Just another rort in the making.


----------



## bellenuit (14 May 2013)

Econ Turbo said:


> Its hard to blame but treasury really ****ed up the forecasts.....




They may not be treasury's independent forecasts. I heard Hockey saying in an interview a few weeks ago, that most treasury forecasts are not made independently, but are calculated by them based on input parameters by the government that treasury may not agree with. These inputs are never published, so no one can cross check their veracity. I would certainly think that using $12/tonne as the carbon price in Europe in a few years would be something they would not have arrived at themselves.


----------



## dutchie (14 May 2013)

ROE said:


> Let compared ALP to average Joe..
> 
> Joe earns $100,000 under Howard years, he spend 80k and has 20k left over
> 
> ...





Is Swannie's Joe related to Gillard's John?


----------



## Julia (14 May 2013)

ROE said:


> Superfund, trust, sole traders now has to pay monthly tax .....that sound like fun






Garpal Gumnut said:


> Typical ALP.
> 
> Putting extra accountancy costs on savers.
> 
> ...






Julia said:


> That wasn't my understanding of what the Treasurer said, with respect to SMSFs.  I may have misinterpreted what I heard where I didn't hear SMSFs mentioned at all.  I didn't listen to all of his speech, so if you could give us a link to the advice that SMSFs are going to have to provide monthly tax returns, that would be appreciated.
> 
> It sounds completely unbelievable and absolutely impractical to me.






ROE said:


> I got it from abc24 no details just
> 
> Superfunds, family trust, sole traders and large investors pay monthly tax...
> I am sure afr will have details tomorrow



I've done some digging to find details about this, not having heard SMSFs mentioned at all during the Treasurer's speech.

This is the relevant extract:


> In a bid to offset the shortfall, pay-as-you-go (PAYG) income tax instalments will shift from quarterly payments to monthly and will be extended to include all large entities in the PAYG system including trusts, superannuation funds, sole traders and large investors. The government expects the measure to net $1.4 billion in tax receipts over the forward estimates period (BUDGET 2013: Fiddles play a two-part tune, May 14).
> 
> Read more: http://www.businessspectator.com.au...013-corporates-fill-budget-hole#ixzz2TGZpesoN




This says "will be extended to include all large entities in the PAYG system.......".
My SMSF has never been attached to the PAYG system and as far as I'm aware, SMSFs are simply required to prepare and submit an annual tax return and audit.  I have never heard of any which submit an annual tax return.  It would be absolutely impractical.


----------



## qldfrog (14 May 2013)

Julia said:


> It would be absolutely impractical.



that is a "must have"to be a labor policy, and you forgot costly..So must be true

disclaimer: I did not check the subject just having some smile...


----------



## sptrawler (14 May 2013)

Julia said:


> I've done some digging to find details about this, not having heard SMSFs mentioned at all during the Treasurer's speech.
> 
> This is the relevant extract:
> 
> ...




That's only if your SMSF isn't required to pay tax.
If your fund is in the accumulation phase and doesn't have tax offsets e.g franking credits, to cover tax payable, then it is subject to PAYG.
Also if you are under 60 and on an account based pension, one would think it will effect you.


----------



## Julia (14 May 2013)

qldfrog said:


> that is a "must have"to be a labor policy, and you forgot costly..So must be true
> 
> disclaimer: I did not check the subject just having some smile...



Yep, understood qldfrog.

I've just been reading Judith Sloan's comment and she says on this:


> But the Treasurer pushed on with a series of badly thought out, and economically harmful, measures to underpin his delusion. Chief among these measures was the decision to change the periodicity of company tax payments from quarterly to monthly.



I'd be surprised if she failed to comment if SMSFs were now to be required to submit monthly tax returns.

Meanwhile, on The Drum, Barrie Cassidy once again shows his true colours:


> Budget 2013: Keep calm and carry on
> 
> By ABC's Barrie Cassidy
> 
> ...


----------



## Ves (14 May 2013)

Julia said:


> ISMSFs are simply required to prepare and submit an annual tax return and audit.



Not if they have notional tax of more than $8,000 and have a tax liability


----------



## Julia (14 May 2013)

> I have never heard of any which submit an annual tax return. It would be absolutely impractical.



Obviously, I should have said 'a monthly tax return'.
Let's see what the detail is in tomorrow's papers.


----------



## sptrawler (14 May 2013)

Ves said:


> Not if they have notional tax of more than $8,000 and have a tax liability




Thanks Vespuria, I didn't know what the threshold was.
Just shows how the stroke of a pen can change everything.
If then they remove the tax exemption from pensions after 60, it would really throw a cat among the pigeons.


----------



## craft (14 May 2013)

Julia said:


> My SMSF has never been attached to the PAYG system and as far as I'm aware, SMSFs are simply required to prepare and submit an annual tax return and audit.  I have never heard of any which submit an annual tax return.  It would be absolutely impractical.




All SMSF's are already subject to PAYG, if you pay enough tax - many don't because of franking credits or zero tax rates.  Unless your taxable income already has you making quarterly payments, you won't have to worry about it moving to monthly. In reality, very little extra work going from quarterly to monthly payments - you still only need an annual return.  Just change the periodic payment amount and frequency, unless you want to vary your instalment amount.


----------



## Ves (14 May 2013)

sptrawler said:


> Thanks Vespuria, I didn't know what the threshold was.



I think we send them out to between 30-40% of our SMSF client base each quarter.   It's pretty painful as you can imagine.

As you said anyone who has their fund in full pension mode would never know that these things exist.


----------



## sptrawler (14 May 2013)

It certainly highlights how fragile the super system is.


----------



## Ves (14 May 2013)

craft said:


> In reality, very little extra work going from quarterly to monthly payments - you still only need an annual return.



Yup, it will just be more pieces of paper and letters that need to be generated by the firms  (most of this process is automated - except for the signing and printing and a few minor details). Some clients receive them direct and just go to the post office and pay them or via BPAY.  I guess it adds up to about an hour a year if you have a fund that pays monthly instalments.   I don't think it's a really big deal either - the accounting firms will just have to absorb the extra time, as it's not really something you would charge, unless you have to do some calculations to vary it or something.


----------



## McLovin (14 May 2013)

On the surface, it seems like a fairly benign budget (certainly not the type we've become accustomed to in the lead up to an election) but it does seem to mark a point of inflexion in the government's finances. The reality that the boom was/is not the new normal seems to have taken hold in Canberra, finally. 

I can't imagine the PAYG changes will be overly onerous on business owners. Even the most basic accounting software will spit out the numbers for you in a couple of seconds.

Business groups will complain about it because they complain about any red tape. Regardless of the actual burden it places on business.

More cuts, higher taxes. I continue to believe that will be the long term trend.


----------



## Knobby22 (14 May 2013)

McLovin said:


> More cuts, higher taxes. I continue to believe that will be the long term trend.




It should be as we are one of the lowest taxing countries in the world. 
There are so many loopholes that need to be tightened such as negative gearing , family trusts and Superannuation. Labor wimped on them all. Unfortunately, we will probably get a GST rise under the Libs instead of getting those rich man perks affected. I hope I am proven wrong.


----------



## sptrawler (14 May 2013)

McLovin said:


> On the surface, it seems like a fairly benign budget (certainly not the type we've become accustomed to in the lead up to an election) but it does seem to mark a point of inflexion in the government's finances. The reality that the boom was/is not the new normal seems to have taken hold in Canberra, finally.
> 
> I can't imagine the PAYG changes will be overly onerous on business owners. Even the most basic accounting software will spit out the numbers for you in a couple of seconds.
> 
> ...




I think small business has hit the wall, unless it is in some way attached to mining.
Without introducing tax reform, that actually targets the concessions on exponential wealth creation, the situation is only going to be compounded.IMO


----------



## McLovin (14 May 2013)

Knobby22 said:


> It should be as we are one of the lowest taxing countries in the world.
> There are so many loopholes that need to be tightened such as negative gearing , family trusts and Superannuation. Labor wimped on them all. Unfortunately, we will probably get a GST rise under the Libs instead of getting those rich man perks affected. I hope I am proven wrong.




They're not loopholes, they're legitimate deductions and structures. How much does imputation cost the federal budget? Should that be binned too?

Tax for the sake of not being one of the lowest taxing countries in the world seems a fairly pointless goal. A government will always find ways to spend money. The last decade has shown neither side is immune from profligate waste and pork barreling. The hard part will be rolling back things like the baby bonus, and the various family tax benefits. Taking from the rich is always easier, because they only get one vote.


----------



## Knobby22 (14 May 2013)

McLovin said:


> They're not loopholes, they're legitimate deductions and structures. How much does imputation cost the federal budget? Should that be binned too?
> 
> Tax for the sake of not being one of the lowest taxing countries in the world seems a fairly pointless goal. A government will always find ways to spend money. The last decade has shown neither side is immune from profligate waste and pork barreling. The hard part will be rolling back things like the baby bonus, and the various family tax benefits. Taking from the rich is always easier, because they only get one vote.




When you have a guy with $200,000,000 in his Super account then there is a point when he doesn't need any more tax breaks. There should be a limit.

Negative gearing to keep taxes low while forcing house prices up is not a worthwhile pursuit, they could say it only applies to new houses and on existing houses you can only negative gear on income, not on wages as takes place in other countries. I have a brother in law who is "forced" to buy a house every two years because of his income. 

Finally, why should family trusts be so powerful, they have lost their purpose and become ways of avoiding tax. OK if you have the money, bad otherwise. They should be limited. 

If they did this then we could build infrastructure which we badly need, and keep up the other great things we have in society such as healthcare. 

I am not against imputation, getting rid of that would mean paying tax twice + it is great for retirees of normal means.

I want to see the deficit ended but if it is ended by a GST that hurts the middle class more than the upper class, then I  will be unhappy. Fix what should be fixed.


----------



## bellenuit (14 May 2013)

bellenuit said:


> They may not be treasury's independent forecasts. I heard Hockey saying in an interview a few weeks ago, that most treasury forecasts are not made independently, but are calculated by them based on input parameters by the government that treasury may not agree with. These inputs are never published, so no one can cross check their veracity. I would certainly think that using $12/tonne as the carbon price in Europe in a few years would be something they would not have arrived at themselves.




According to Andrew Robb on Lateline tonight, Treasury provides the government with a range of forecasts for their budget - each based on different assumptions (growth, dollar etc.). The government chooses which one to use. So we never really know (at least on budget night) which particular forecast Treasury regards as the most likely. According to Robb, Labor is probably working on the most optimistic forecast as it allows them to appear to be returning to surplus over time, but will simply lump the Coalition with a time bomb when reality hits fantasy.


----------



## sptrawler (14 May 2013)

Knobby22 said:


> When you have a guy with $200,000,000 in his Super account then there is a point when he doesn't need any more tax breaks. There should be a limit.
> 
> Negative gearing to keep taxes low while forcing house prices up is not a worthwhile pursuit, they could say it only applies to new houses and on existing houses you can only negative gear on income, not on wages as takes place in other countries. I have a brother in law who is "forced" to buy a house every two years because of his income.
> 
> ...




Can you explain how someone could get $200,000,000 into super, you're being a dick.
There has allways been limits on how much you can put into super.
Coming up with stupid sums isn't helpfull for your arguement. Just comes up as a Wayne Swan statement.lol


----------



## Knobby22 (14 May 2013)

sptrawler said:


> Can you explain how someone could get $200,000,000 into super, you're being a dick.




There is a guy with $200,000,000 in Super. I heard some economists talking about him on Radio National last night.

Anyway we've gone off topic. Back to the budget.


----------



## sptrawler (14 May 2013)

Knobby22 said:


> There is a guy with $200,000,000 in Super. I heard some economists talking about him on Radio National last night.





Priceless, just priceless, ring up the ATO


----------



## McLovin (14 May 2013)

Knobby22 said:


> When you have a guy with $200,000,000 in his Super account then there is a point when he doesn't need any more tax breaks. There should be a limit.




I'm not disagreeing with that, in fact if you look at _any_ of the super threads on here, I think earnings should be taxed as ordinary income. That being said, what you are describing is not a loophole anymore than middle class welfare is a loophole. 




Knobby22 said:


> Finally, why should family trusts be so powerful, they have lost their purpose and become ways of avoiding tax. OK if you have the money, bad otherwise. They should be limited.




What power do they have? All they allow you to do is stream income and shelter assets. Get rid of trusts and most users of trusts will just corporatise their earnings. Hard to believe there would be much improvement in revenue.

There are so many myths around family trusts. 



			
				Knobby22 said:
			
		

> I am not against imputation, getting rid of that would mean paying tax twice + it is great for retirees of normal means.




What's wrong with paying tax twice? The company and the individual both utilise the resources of the state as independent actors. Is it sound economic policy that retirees are being handed back the tax paid by some of the most profitable enterprises in the country?

The above is more of a Devil's advocate question.



			
				sptrawler said:
			
		

> Can you explain how someone could get $200,000,000 into super, you're being a dick.




Somewhere on the ATO website there is a breakdown of SMSF asset sizes, from memory, there were 5 SMSF's with >$100m in assets.


----------



## sptrawler (15 May 2013)

McLovin said:


> What power do they have? All they allow you to do is stream income and shelter assets. Get rid of trusts and most users of trusts will just corporatise their earnings. Hard to believe there would be much improvement in revenue.
> 
> There are so many myths around family trusts.
> 
> ...





Well Mclovin, what is the difference between sheltering assetts and corporatising their earnings, in a familly trust or a familly super fund?
At a moral level not a tax level?


----------



## McLovin (15 May 2013)

sptrawler said:


> Well Mclovin, what is the difference between sheltering assetts and corporatising their earnings, in a familly trust or a familly super fund?




Err...the tax rate paid, when you can access the assets, the fact that you can't run a small business through your smsf...


----------



## sptrawler (15 May 2013)

McLovin said:


> Err...the tax rate paid, when you can access the assets, the fact that you can't run a small business through your smsf...





So why would you knock smsf getting imputed credits?

Seems as though you want the cream now and probably will want to have the cream later.


----------



## McLovin (15 May 2013)

sptrawler said:


> So why would you knock smsf getting imputed credits?




Because it's Tuesday.


----------



## sptrawler (15 May 2013)

McLovin said:


> Because it's Tuesday.




Fair enough.


----------



## McLovin (15 May 2013)

sptrawler said:


> At a moral level not a tax level?




Sorry, I missed this bit, and didn't actually know what you were getting at. At a moral level and ignoring tax (which is the elephant in the room) the structure is irrelevant to the point I was making.

And that's all I'm going to say on it, lest this become another super thread.


----------



## moXJO (15 May 2013)

McLovin said:


> On the surface, it seems like a fairly benign budget (certainly not the type we've become accustomed to in the lead up to an election) but it does seem to mark a point of inflexion in the government's finances. The reality that the boom was/is not the new normal seems to have taken hold in Canberra, finally.
> 
> I can't imagine the PAYG changes will be overly onerous on business owners. Even the most basic accounting software will spit out the numbers for you in a couple of seconds.
> 
> ...




This is a big issue for business. Labor has made constant attacks on sole traders and this will be the one that sinks them. Having to now stuff around monthly with added costs is typical labor.


----------



## Aussiejeff (15 May 2013)

The worse thing about this Budget?

Knowing Labor still has 4 mths to dig an even deeper hole for the Oz economy....


----------



## Julia (15 May 2013)

craft said:


> All SMSF's are already subject to PAYG, if you pay enough tax - many don't because of franking credits or zero tax rates.  Unless your taxable income already has you making quarterly payments, you won't have to worry about it moving to monthly. In reality, very little extra work going from quarterly to monthly payments - you still only need an annual return.  Just change the periodic payment amount and frequency, unless you want to vary your instalment amount.



Thank you, craft, for (as usual) clear and helpful comment.

So not at all the interpretation by gg as below.



Garpal Gumnut said:


> Typical ALP.
> 
> Putting extra accountancy costs on savers.
> 
> ...


----------



## McLovin (15 May 2013)

moXJO said:


> This is a big issue for business.




Why? The information that is required will already be there, it's just a change from quarterly to monthly. My IAS takes about 30 seconds to fill out and involves getting my computer to spit out some numbers, filling in two boxes and doing a little multiplication. I can't see why it will be significantly more onerous to shift the requirement to monthly rather than quarterly.


----------



## Dibbler (15 May 2013)

McLovin said:


> Why? The information that is required will already be there, it's just a change from quarterly to monthly. My IAS takes about 30 seconds to fill out and involves getting my computer to spit out some numbers, filling in two boxes and doing a little multiplication. I can't see why it will be significantly more onerous to shift the requirement to monthly rather than quarterly.




I'm an inclined to agree, I fail to understand beyond cash flow for the commonwealth what this achieves in terms of extra revenue. In some respects it should be better for small companies as they can pay monthly rather than having to save the money and make a quarterly payments which some business owners seem unable to budget for.

I didnt hear what level the changes came down to last night but according to the ATO website http://www.ato.gov.au/taxprofessionals/content.aspx?doc=/content/00338153.htm
it currently only filters down to businesses with over $20Mill T/O after Jan '16 not what I would call 'Small business'

For Example say I currently pay $60k Corp Tax per year, whether I pay $15k p.q or $5k p.m makes little difference to me, I have to submit PAYG Witholding every month anyway. 

Any idea how this affects the bottom line of the budget?

Simon


----------



## Judd (16 May 2013)

In my view the worst thing about the Budget 2013 is the scrapping of the Medical Expenses Tax Offset.  You know the one where if you incurred out-of-pocket health expenses over $2060, you would receive a rebate of 20% of the costs above that.  Gone or rather means tested as per advice from the ATO web-site:



> Taxpayers with an adjusted taxable income above $84,000 for singles or $168,000 for a couple or family in 2012-13 will be affected. The family threshold will increase by $1,500 for each dependent child after the first. These taxpayers will only be able to claim a reimbursement of 10% for eligible out of pocket expenses incurred in excess of $5,000 (indexed annually).




So if you have a disability, we come to you with open arms but if you have serious health issues, screw you as you can afford it.  I know of no family who would willingly undergo the trauma of medical intervention merely to obtain a crappy tax deduction and I feel they should not be done over like this.

However, I probably live on a different planet so it's all OK.


----------



## Knobby22 (16 May 2013)

Judd said:


> In my view the worst thing about the Budget 2013 is the scrapping of the Medical Expenses Tax Offset.  You know the one where if you incurred out-of-pocket health expenses over $2060, you would receive a rebate of 20% of the costs above that.  Gone or rather means tested as per advice from the ATO web-site:
> 
> 
> 
> ...




I agree. it is the worst decision in the Budget.  This is a real negative.


----------



## MrBurns (16 May 2013)

Knobby22 said:


> I agree. it is the worst decision in the Budget.  This is a real negative.




These things slip under the radar, covered neatly by timely tears that divert attention.


----------



## FlyingFox (16 May 2013)

McLovin said:


> What power do they have? All they allow you to do is stream income and shelter assets. Get rid of trusts and most users of trusts will just corporatise their earnings. Hard to believe there would be much improvement in revenue.
> 
> There are so many myths around family trusts.




With McLovin on this. There may have been loopholes with trusts but a lot of them have been tied up over the years. Tax thresholds for minors for unearned income are essentially non-existant. Hybrid trusts have essentially been made illegal.

In fact if you are using a trust structure for other reasons than asset protection, you are perhaps putting a big bulls-eye on yourself from the ATO.


----------



## McLovin (16 May 2013)

FlyingFox said:


> In fact if you are using a trust structure for other reasons than asset protection, you are perhaps putting a big bulls-eye on yourself from the ATO.




Bingo.

The ATO has been continuially lowering the asset test for "preliminary risk reviews". Iirc, it was $100m, then it dropped to $30m and now it is down at $5m. This has gone hand in hand with a huge increase in funding for the team that investigates this sort of stuff. The prevailing theory now is that if you have significant assets it is when not if the ATO will come knocking for a look under the bonnet.

Since 2008, and the fall off in revenue, they've been making sure they get every cent they're entitled to. My accountant was telling me one of his clients was modestly late (30 days) paying his GST and the ATO went straight into his bank account and took what they thought they were owed.

Cheating the tax man is bad for your health, imo. There's 650k trusts in Australia, I'd hazzard most of those are not set up to avoid tax.


----------

