As we get closer to the 2018 Federal Budget, to be delivered by Treasurer Scott Morrison on 8 May, rumours keep circulating about new tax measures.
Our recent blog post, “The annual May guessing game: what to expect at this year’s Federal Budget”, noted speculation that the budget could include individual income tax cuts and an overhaul of the research and development (R&D) tax incentive. An earlier proposal to increase the Medicare levy to 2.5% was a late scratching.
Since the last blog post, the following potential starters have emerged:
- SMSFs may be allowed to have six members rather than only four; and access for SMSFs to use SuperStream (the electronic system for transmitting money and information across the super system) for rollovers and
- changes to the Petroleum Resources Rent Tax (PRRT) system to boost tax paid by big oil and gas companies. That could be done by curbing “uplift concessions” which determine tax deductions associated with exploration and construction.
We have complied a “favourites” list of the rumoured tax measures, starting with the most likely:
- Personal income tax cuts – odds-on favourite. Some goodies for voters before the next federal election, to be held by mid-2019
- Boost for SMSFs – Short odds. Announced by Kelly O’Dwyer at the SMSF Expo on 27 April
- Overhaul of the R&D tax incentive – even money. The Treasurer himself announced the integrity review which will save much needed revenue
- PRRT hit to oil and gas – an outsider but could surprise on the day
- Adopt Labor’s changes on negative gearing – 100-1 roughie.
The Canberra track will be frosty and should favour the vote-getters.
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