Just watching the Budget 2015.
It looks like there are a lot of changes and new initiative that could put money in your pocket…or take it out of your pocket!
I thought it would be interesting to hear what the Ozbargain community thinks of it.
Federal Budget 2015 Discussions - What Is in It for You?
Mad Max on 12/05/2015 - 19:49
Last edited 12/05/2015 - 19:50
Last edited 12/05/2015 - 19:50
Comments
Joe still try to work out his computer thing how make people pay more TAX.
Introducing it is one thing. Making it work is another. Let's see if they're still in gov long enough to make it work.
Its still the first step in the wrong direction.
Good policy - creates a level playing field for Australian companies who are offering competing services.
Not to worry. 1.7.2017 is a long time.
GST was introduced before internet shopping really took off, adding 10% to purchases for online content may seem like a rip, but you were really just getting it tax free in the past and now you need to start paying for it. Toughen up!
I believe the government would love to collect consumption tax for both money spent at local business and overseas. We haven't really paid this "Netflix Tax" previously possibly because it is very difficult to ask an overseas company to collect tax on behalf of the Australian government.
I can't find any detail on how this can be enforced though. It's probably easy to target a few large companies to ask them to collect GST — Netflix, Google, Apple, etc. That means some obscure subscriptions you have with small websites might still be exempted.
There are still legislated small tax cuts due to the old Carbon Tax. When the government removed the carbon tax, they tried to roll back the tax cuts, but they were blocked in the Senate.
So… a hefty $83 tax cut for me!!! :Phttp://www.taxcalc.com.au has the new rates and calculator
Thank goodness for the Labor party and the senate. This cruel Liberal party is hoping people will be stupid enough to vote for them so they will get a majority and do some real damage to health and education.
ALSO, HOCKEY SAID THAT OUR ELECTRICITY BILLS HAVE BEEN GETTING CHEAPER… EXCUSE ME HOCKEY BUT MY ELECTRICITY BILLS HAVE BEEN GOING UP!!!!
Well, you are on a Ozbargain community forum, check your rates, compare, get the best deal.
More importantly check if you or family are wasting electricity? Turning off from power points, using LED globes from all those deals, not using hot water unless you have to, educate your family.
But if you still can't work out why is your electricity bill going up, give Joe a call next week, he will be busy explaining budget this week. Maybe he can explain you a term called 'inflation'.
Don't think he will have anything to do from next week onwards.Maybe your computer is using more energy because you're making it yell all the time…
http://www.abc.net.au/news/2014-06-27/tony-abbott-carbon-tax…
You weren't silly enough to believe the lying Liberals were you?
I am not a Liberal voter, but I think this was a good budget overall. I am pleased to see that the Government has come to realize that when the economy is growing below trend, it needs to stimulate rather than cut.
Good points to come out of it:
- Plan for additional funding for infrastructure in North Australia.
- Roll back of last year changes for unemployment payments for under 30's.
- Handouts for small business to incentivise investment.
Downsides:
- No changes to the large cuts to education and healthcare announced in last years budget.
- No changes to personal income tax brackets. Personally, I believe these should be indexed against CPI or AWE (legislated, not at the whim of the Government of the day)
- Additional funding spent on anti-terrorism measures, including a vast invasion of private citizens privacy. I personally believe this money could be spent more productively in education or welfare to reduce bigger threats to our society (like inequality).
climate schmimate..
Agreed that the government has no credible plan for tackling climate change. But tbh I've given up on the them on that issue.
Perhaps I should rephase my content to, it's a good budget for this government.
Then again, the Labor party's plan (Clean Energy?) was a horrendous sink of money with marginal carbon reduction. So that was no better
Creating a market for trading emissions is a creditable solution to reduce carbon emissions. By limiting production of carbon emissions and allowing a free market to determine which industries can emit the constrained carbon it will drive out inefficient industries.
With respect to infrastructure, I feel that this budget falls short of the Prime Minister's own election statement of being known as 'an infrastructure Prime Minister". The benefits of building infrastructure are usually very wide reaching (job creation, economic efficiencies, future proofing, etc). It is good to see they have set some funding set aside for Northern Australia, which has probably been neglected in the past. Although, Keep in mind that the figure that the government is proposing for NA appears to be spread over a 12 year period.
It's just a shame that our political cycle and in many cases poorly informed voters, leads to so many poor decisions just for the sake of political longevity.
Imagine if one day a government had the balls to just bite the bullet and really spend up big on infrastructure/research for the good of our future, i.e. national high speed rail, airports, roads, education, science.
Yes political suicide, but surely a cause worth pursuing. It's a shame there is so much scaremongering related to running budget deficits.
Yes. This.
The last government to have a genuine opportunity to do this was Rudd, but instead we got $950 payments/pink batts/building schools - which was all for nought. Sure, running a deficit is not necessarily a bad thing - but WHY you are running a deficit is equally important.
if one day a government had the balls
Best if they have at least half a brain too. Very easy to piss away money on dud infrastructure when its just an ego trying to leave their mark. Infrastructure projects need to be carefully analysed for return on investment, and this needs to be open to public scrutiny to
preventreduce lying and corruptionAgreed. The analysis on infrastructure can be undertaken by all the greatest minds in Australia. But if the politicians are just going to cherry pick the projects that suit them based on collecting the public's votes in a particular electorate, well then we've all wasted our time and money. Unfortunately this is the incentive that is driving the politicians at the moment.
What needs to happen is to create greater scrutiny and some separation between politicians and the cherry picking process. There are so many professional organisations already out there that could be used to deliver this, such as Engineers Australia, Infrastructure Australia etc.
From Small Business perspective, it has been a good budget.
- 28% company tax for less than $2m annual turnover, and up to $1000 discount on tax for sole traders.
- $20k instant write off!
- FBT exemption for extra portable device
- ESS tax changes which would benefit startups hiring talents
just wondering what if i am on salary.. then i just register as sole trader and claim 20k instant write off without doing business?
I'm sure that will be clarified over the week, because almost everyone I have heard from mentioned doing the same thing!
New business, needs a Surface pro 3 + external monitor + software, coffee machine, trailer, nice 4 stroke lawn mower, line trimmer etc etc
but I think its actually a deduction against the tax to be paid on future income, so not returned to you as a refund.
It is a good idea, but I think the write off deduction has to be against the actual income of the business, not previous or even ongoing salary income. Assuming that, with the new 28.5% business tax rate, your spending spree will still cost you 71.5% of your own money. It is OK if you needed the items anyway, but hardly worth to buy just for the sake of the write off deduction.
well… surely very interested to know if this is allowed or not and why?
@pembajak_sejati:
This question was asked at the National Press Club address this afternoon. Basically, the ATO will be scrutinising these claims very closely. You can't just register an ABN and let rip.When you consider this mob is doing the OzB equivalent of fishing for gold coins in the couch (clawing HECS debt from OS residents, making visitors on working holidays pay income tax, reducing health testing etc) it makes perfect sense.
At least they came through with a three-word-slogan: Have A Go!
Sole trader income isn't taxed at the company tax rate, it's taxed at your marginal tax rate. So it may be less than 28.5%, but it will most likely be more
These are expense against your business income. If you don't do any business, i.e. NIL business income, I am not sure whether you can use the expense & business loss against your personal income. Likely not, but ask your accountant.
At the end of day $20k write off just means you get the money back quicker or pay less company tax for the current financial year but almost no difference after the items are fully depreciated. It should improve the cashflow for small business although from my perspective the impact is minimal. It's just less hassle to write off something as expense in the accounting software, than having to ask an accountant how to depreciate that properly.
Anyone thinks this query stinks of fraud? If you consider doing this, make sure you do it as a personal Etax return submission and don't go through an agent or accountant. If yours as anything like mine, he will clobber me for making such a suggestion - meaning, he throws the eraser across the table at my face. (which explains why I will always be poor) But there are some out there who would allow it so to speak. Still, a legit query to ask considering many others have the same idea. In fact there may already be a loophole.
The answer to your question is the non-commercial loss tests (which still exist).
Basically, without $20k of turnover in your business you can't claim any losses.
So you can register as a sole trader, claim 20k of instant write off, but you won't be able to claim it against the rest of your income.
No, you have to be actively doing business and reporting quarterly, this is the requirements.
The changes to paid parental leave is a bit tough on new mothers…
A bit tough? It's a complete backflip from Abbott's PPL election promise. Oh well, at least this funding can be redirected to stopping more boats and the creation of a tough borders.gov.au website.
Lucky for me the PPL changes doesn't kick in until 1/7/2016.
We are expecting our baby in Sep 2015 :-)Keep hatching dem eggs :)
Congratulations congngo
Time to get an iPhone & laptop for claim the instant deduction :-)
That's 30% saving plus no more need to worry about deprecation schedules :-)
Why does there need to be anything in it for me? I pay my taxes, I expect defence, private property rights, a welfare safety net, etc. Why would I want handouts when they come from the very taxes that I am already paying? More handouts = more taxes.
Why, because Australia has become a me me me nation. What's in it for me. If only we could look upon our grandparents and great grandparents as examples of diligence and tenacity. So many were migrants who came without so much as a suitcase in their hand. And they worked as well as procreated without expecting all these benefits. PPL never existed in my time, we just learnt to cope and cut back on one income only and a high interest mortgage! It was hard, no holidays at all for 12 years in a row and the kids missed out.
I really admire the hard work ethic of older generations, but please…
Procreation is not an admirable pursuit, particularly given the alarming number of humans on this planet already (i.e. name a serious modern day crisis, and 90% of the time it can be linked in part to overpopulation - climate change, poverty, over-fishing, extinction, many wars, inequality, unemployment, congestion, housing prices etc etc.).
Contextually things are very different now. Life is undoubtedly easier in many ways, but it is no longer possible to comfortably support a whole family on a single "entry-level" income. Equally the education requirements for most reasonably paying positions are becoming longer/harder. Also buying a house will set most families back 10 x their annual income (where it used to be around 3 times).
"What is in it for you" to me means how much of MY hard earned money can I keep in MY pocket. I don'expect it to mean how much of someone else's money can I put in my pocket courtesy of government's welfare and hand outs.
thumbs up I love your attitude :)
I'm generally a liberal voter, but have no real alliance. I'm really disappointed to see over and over again, the refusal of governments to limit negative gearing to new properties only.
This continue tax break for people to invest in existing properties just does nothing for society other than give the wealthy enough to invest a tax break.
The whole idea of deducting interest from investment is that the investment is suppose to provide prosperity to society, like a business selling burgers or something. Get rid of negative gearing on property and shares and other activities that don't provide for anything for society and I will be happy.
quesion about the 20K small busniess rebate.
What if your tax is less then 20K? Can you still claim the 20K and how will it be applied?
bloody abott
As a soon to be junior doctor the cuts to health are concerning. Deep cuts are being made to the health system but little information has been given as to which programs the cuts will specifically affect.
Public hospital staff will also get an effective pay cut when salary packaging of previously uncapped items gets capped to $2550 (note that the widely reported $5000 is the "grossed up" value, not the pre-tax amount) from next FBT year. The decision at the federal level has not taken into account the fact that each state has negotiated its enterprise bargaining agreement assuming the fringe benefits regulations that were current at the time - now there will be a decrease in the tax break but no corresponding pay rise to compensate.
This bit really sucks.
Yep, from unlimited to 2,500 really sucks. If you go on a holiday and claim the accommodation then hardly anything left for meals.
And spend all the money into the blackhole of anti-terrorism
I think the words "What Is in It for You?", is actually what's is wrong with the world today. People in general are very selfish and narcissistic, and unable to think if terms of "The Community", "The Greater Good" or "What's good for the country". Today it's all about "Me, me , me" and "Gimme more". More middle class welfare, more handouts for the poor, more concessions for big corporations. Everyone is on the take, from the bottom end of town to the top end of town People are like the Ferengi in Star Trek and LarFleeze in DC Comics. Democratic capitalism is corrupts and deforms the soul of man.
Guys, lately I have been doing some private work from home and been invoicing as a sole trader. I would say roughly I will be earning close to 10K this financial year. With the 20K instant write off, can I buy myself a new computer (about $2K) and claim it? I have not paid any tax on my ABN income so my understanding is that I will have to pay atleast $2850- $1000 = $1850 tax (assuming I will earn $10K by end of June). So essentially if I buy a $2K worth of computer I don't pay any taxes?
many thanks
An expense directly reduces your taxable income. So $2k expense means your taxable income is $2k less, not that you pay $2k less tax.
So if your business income is $10k, and you purchased $2k asset for business use (computer in this case), your business income becomes $8k, which you need to pay tax on depending on whichever bracket you are in (as the business is sole trader).
Ask an accountant though :)
Thanks Scotty, it makes more sense now :-)
How have you calculated your figures? Is your sole trader income in addition to a salaried day job or similar?
Yes, the income is on top of my other regular job.
from: http://www.abc.net.au/news/2015-05-13/budget-2015-small-busi…
Looks like in your case you may not be eligible?
Who is eligible?
The $20,000 tax break applies to businesses that can demonstrate ongoing activity via quarterly Business Activity Statements, Small Business Minister Bruce Billson said.
The business must be actively trading to be eligible for the break.
Yes, quarterly business activity statements suggests already being registered for gst.
I am not registered for GST as I do not make anywhere close to 75K/annum on ABN.
$13 tax cut….. WOOHOO!!
So let me get this right… you work out how much tax your business is going to need to pay, then buy stuff equal to that amount, and then you wont have to pay any tax… is this roughly what the deal is??
So say dads business makes 60k taxable income in the year, and his tax that he will have to pay on 60k is around 15k (for example sake only). So if he buys a 15k car, then he wont have to pay this income tax?
What if he buys a 20k car, would he get a 5k tax refund? I'm guessing no.
No. As someone explained above, It's a tax deduction not a refund. It's the same as any business expenses would work now, the purchase limit is just much higher.
So it would be $60k income minus the $20k spent on the car. Your taxable income then becomes $40k and you pay tax on that, maybe $10k. You've saved $5k off your tax bill but you still had to spend the $20k to get the car. It's a great incentive if people were on the fence with purchasing items but probably not a good idea to go spending money for the sake of it.
Pretty sure you would still need to be able to prove a business purpose for any purchase. If you just have an office down the road, going to and from the office won't cut it. If however you go between two offices or do house visits etc then you're probably ok. There's a lot more to it as well, eg. if you use it for personal use as well then you can't claim the whole amount blah blah. Go talk to an accountant anyway.
PLEASE NOTE I am not an accountant and this is not advice and all that jazz.
No. It's a tax deduction, the only difference is that instead of having to depreciate it over a number of years, it now is claimable all at once.
Your dad previously had 60k taxable income on a small business, meaning 60 x 0.3 = 18k taxes payable.
Then if he bought a 15k vehicle for business purposes, he had to depreciate it over several years. I don't recall the exact percentages, but someone above mentored 15% in the first year and 30% thereafter. So let's use that = 60 - 15 x 0.15 = 57.5 taxable income x 0.3 tax rate = 17.325 k taxes payable. But the remaining 85% of the vehicle's cost can then be depreciated over the following years.
Now, the vehicle can be claimed as a tax deduction immediately, and the tax rate is down by 1.5 %, so: 60 - 15 = 45 taxable income, and taxes payable = 45 x 0.285 = 12.825 k.
I really don't see why people are so excited about this. In no scenario does it reduce your dad's taxes paid to zero or even close to it.
assuming he has no other asset purchase in the year, and he is eligible for the 20k, isn't he can just claim all the car value as long as it's less than 20k rather than going through the depreciation thingy?
Yeah I think they justified it as "it's money that business owners would have claimed back anyway, it's just bringing it up to claim straight away rather than depreciation over a few years". Not a direct quote but close enough.
I think I'm starting to get it, so your saying its not a deduction from your income tax payable, rather its a deduction from your taxable income.
So you earn 60k. Your taxable income is 60k. Tax is 28.5%. Tax payable is $17,100
OR
You earn 60k. You buy a 15k car. Your taxable income is now 45k. Tax is 28.5%. Tax Payable is $12,825 - you save $4,275.
Is this basically whats going on (ignoring all other reductions etc)??
Bonus Question: sorry if its already been answered, is this for sole traders as well?
@Riczter: one thing to note is that you don't "save" $4275. First of all you need to spend $15k to get the tax reduction. Secondly, previously the car would go into depreciation anyway so you get smaller amount of tax reduction each year through the life of the depreciation. You end up actually don't save anything at the end (other than interests generated).
Yes. No actual saving at all but less out of pocket at the beginning. However it send the small business are going to spend like crazy this EOFY which I guess would be good thing for the economy.
The up to $20,000 deduction is "per item".
So if you really did not want to pay any tax and had $60,000 business income you could buy 3 x $20,000 items.
You spend $60,000 but you save $18,000 tax (current company tax $60,000 x 30%)!It says purchases up to $20,000 thus not necessarily per item.
http://www.watoday.com.au/wa-news/wa-state-budget-2015-wa-ge…
Western Australians are being Taxed $99 a year on each car or bike, this really sucks!
Every other State already has no fault CTP, and I think we still have the lowest CTP/licence duty in the country.
Something I always wondered..
If this government introduces these budget spending/taxing policies?
and if they lose the next electionWhat happens to these budget policies that was introduced?
If they're legislated they stay in place until the next government specifically repeals them, if they ever do. It's easier to complain in opposition than it is to make change in government.
So if a government makes a law and a new government comes in..
They can repeal the law easily?
Do they have absolute power to repeal a law?==
Also the last budget, not everything passed..
So how to make or spend money, when some of those laws/budget never passed?
e.g. HECs reform etc..
Hotpotcorn on 12/05/2015 - 20:05 Comment score below threshold.