The title of this blog says it all – last night’s budget was a dog’s breakfast!
The changes effect negative gearing, CGT, and taxation of trusts. The negative gearing and CGT changes are proposed to take effect 1st July 2027. The changes to trusts are proposed to take effect from 1st July 2028, with some additional transitional allowances for trusts that trade as a business.
I won’t go into all the changes in detail because there is no way the changes, in the form they were announced, will pass as legislation. The way the current government has drafted these proposed changes is so overly complicated, that it is really a waste of time to try and strategize at this point. We will certainly be following it closely though, and when we have a clearer line of sight, we will look at new tax minimisation strategies for all our clients.
A few small positives from the budget;
- $20,000 asset write off is now permanent (for businesses under 10M turnover)
- Re-introduction of loss carry-back provisions, allowing companies to carry back tax losses from current years against taxes paid over the previous two years (turnover under $1 billion).
- The government have bought in an instant $1000 tax deduction without receipts (staring next 27FY). Previously it was $300.
- $250 tax credit for all salary and wage workers. What a stupid initiative. This shouldn’t even be on the list of positives. $250 ….. a slap in the face really. I feel like we have been unjustly sent to prison and now we need to say thank you for our piece of mouldy bread.
I am not political at all, but from an economic perspective, this is the worst budget I have seen in a long time. Bad for the average taxpayer, bad for business, bad for investment and bad for the accountant that will need to understand and advise on this mess.
We will keep you updated. All the best.
Jacob and the Team
