News Detail

Federal Budget Review

The first Labor Party Budget in 13 years is being described as a “meat & three veg. Budget.” The main focus was of the Budget was on setting aside $41bn from a record budget surplus to establish “future funds” for education, health and infrastructure purposes.

Some of the changes that affect Espreon Corporate Services’ products are as follows:

• Income to be used to determine eligibility for government support programs will include salary sacrifice super contributions from 1 July 2009.
• Preservation of the tax-free superannuation payments to people over the age of 60.
• Change to the definition of 'family' in the family trust election rules, from 1 July 2008. This will limit lineal descendants to children or grandchildren, precluding family trusts making a once-off variation to the test of an individual specified in a family trust election (other than in relation to a divorce), and reducing the scope for family trusts being used to lower income tax by utilising losses.
• Small business Capital Gains Tax (CGT) concessions to taxpayers who qualify under the wm aggregated turnover test will be extended to those who own a CGT asset used in a business of a related party as well as partners owning a CGT asset used in a partnership business.

Budget Summary

• Cash surplus of $21.7bn - the biggest in GDP-terms in nearly a decade.
• Cost savings of $33bn over 4 years, including $7bn in 2008-09.
• Promised income tax cuts totalling $47bn over 4 years.
• Tax cuts worth $20 a week for someone on $48,000pa.
• $41bn for 4 new major “future funds”; infrastructure, education, health.
• Medicare levy surcharge thresholds increased; from $50,000 to $100,000 for singles, from $100,000 to $150,000 for couples.
• Family tax benefit to be means-tested.
• Tax rates increased on luxury cars and ready-to-drink beverages.
• Widespread national review of taxation (GST rate not to be raised).
• Labor's 'education revolution' to cost an extra $5.9bn over five years.
• 50 per cent tax refund on education expenses for school students.
• Baby bonus to rise to $5,000 from July 2008, but means-tested from January 2009.
• Child care tax rebate to rise from 30 per cent to 50 per cent, paid quarterly.
• Rental affordability scheme, aimed at 50,000 new rental properties by 2011-12.
• Lump sum payments for seniors, and carers.
• More carers of disabled children eligible for payments.