2019 Federal Budget Announcement
The annual Federal Budget is an event full of buying votes, new ideas, old ideas rehashed and new tax opportunities and pitfalls.
In an election year, politicians’ imaginations run a little wild… so we’ve provided a summary blog and a longer assessment in case you want to know more.
This year we are excited about two initiatives which in one form or another are likely to get bipartisan support. These will be good for clients, good for business, good for the economy:
- Low and middle income earners are likely to see a larger tax return next year with income tax offsets or lower tax rates.
- Businesses get the opportunity to invest with the immediate asset write off increasing from $20,000 to $30,000. However it still costs real money to buy assets, so take the time to assess and make a wise investment decision or retain the cash in your business to deliver higher profits.
With an election looming, uncertainty is the challenge. How many ideas from either party will make it past an election, past special interest lobbyists, into the Lower House as proposed legislation, through a difficult Upper House and passed into law? Not many, and even fewer in the form as currently proposed.
Add to that, the ideas being floated on reducing the tax rate for small business, limiting franking credit refunds, changes to negative gearing rules, reducing the Capital Gains Tax discount from 50% to 25%, adjusting super contribution limits, changes to taxation of trusts and more…
What to do?
Relax, be aware, consider the risks, don’t jump at shadows, and most importantly, focus on facts and what is in your control:
– Business planning
– Cashflow management
– Process improvements
– Cost control
– Financial planning
– Debt management and interest rate review
– Personal and business insurance
As far as investments are concerned, they must make sense commercially first. After that, we optimize tax outcomes. Investments made solely for tax reasons rarely turn out well and are subject to tax policy risks outside of our control – remember bluegums?
Personal decisions should focus on prosperity; building wealth, providing security and personal health, happiness and wellbeing.
At Porters CA we can’t read the future, but rest assured that we are considering the risks of various tax changes to our clients. We do our best to identify where you are coming from and how best to help you – please pick up the phone or send us an email if you want to talk about how we can help you better.
As far as the details are concerned, follow this link to the 2019 Federal Budget Announcement for more.