As we head to the polls, it is timely to analyse some of the policy proposals from the major political parties. Any impact will depend on your individual circumstances and please remember that these policies are yet to be legislated and often the devil is in the detail. The list below highlights the more common financial policies in the media at present.
Labor Proposals:
Higher personal tax rates for the top end and lower personal tax rates for those on less than $125,000. They also intend to reinstate the 2% deficit levy
An increase in the Medicare levy to 2.5% with a more generous levy arrangement for lower paid workers
Limit negative gearing to newly built residential dwellings (date not yet decided). Property investments made before this date will not be affected
Halving the capital gains discount to 25% for individuals
Min tax rate of 30% on all distributions from discretionary trusts
Abolish certain franking credit refunds for excess creditsLower the annual non concessional cap to super to $75,000
Oppose the catch-up contributions on concessional contributions and the tax deductibility on personal super contributions currently in place
A new deduction (the Australian Investment Guarantee) which will enable a 20% deduction in respect of any new eligible purchase worth more than $20,000
Increase the SG contribution to 12% as soon as practicable
Phase out the $450 minimum monthly threshold to be eligible to receive super guarantee contributions
Coalition’s current policies:
The government has legislated personal income tax thresholds to be rolled out in three tranches over the next 7 years
No change to negative gearing
No change to the CGT discount which is currently 50%
No change to trust distributions – currently these are subject to tax at the beneficiaries marginal tax rate
No change to franking credits, this means that excess credits can be paid as cash refunds
Reduce company tax rates for companies with an aggregated turnover of less than $50m to 25% by 2022
This article is not intended to influence in any way, merely inform you of proposals that may affect you financially. Again, we remind you that the above are conceptual only and not yet legislated.
While all care has been taken in the preparation of this material, no warranty is given in respect of the information provided and accordingly neither Tanya Carlson, GPS Wealth Ltd nor its related entities, employees or agents shall be liable on any ground whatsoever with respect to decisions or actions taken as a result of you acting upon such information