Last Updated May 10, 2011 6:23 PM EDT
(Episode 740: 12 minutes 05) Listen on iTunes.
There wasn't a lot of depth to this year's budget. Wayne Swan warned us that it would be a tough budget, but it wasn't that tough. As David Pring, tax partner at Deloitte, explains in today's BTalk, the central planks of the government's economic policy are all missing --- the mining tax and carbon tax are yet to happen, and there is a review of tax slated for October (they have budgeted close to a million dollars for a two day forum to discuss it). Given they all have sizeable impacts this was always going to be a budget that was more about tinkering at the edges.
Still, that tinkering amounts to $20 billion in cuts, required to turn a government deficit into a surplus by 2012-13. Getting back to surplus will be helped by a forecast growth in GDP, up to 4 percent in 2011-12, well above the current 2.25 percent.
Some of the items that might impact you:
- The dependent spouse tax offset will disappear from 1st July 2011 --- that could make some people a couple of thousand dollars worse off
- FBT on car travel will increase to 20 percent (from 7 or 11 percent) for anyone who drives more than 25,000 kms (unless they apply the log-book method)
- From 1st July 2012, an immediate small business tax deduction for the first $5,000 of any capital items, such as a new car
- Reducing the unearned income a child can receive tax-free from $3,333 to just $416 --- to cut down on the use of family trusts to reduce tax liabiltiies
- Freezing of upper limits on superannuation contribution levels and the upper income limit for family payment eligibility. In both cases read "freezing" as meaning "gradual decline" in line with inflation.
Hear more in today's BTalk podcast with David Pring, and be sure to leave us your thoughts in the comments section below.