TAXATION – GOVERNMENT POLICY – AUSTRALIA

Top tax rate for 13.3 million will be 30pc

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Original article by Joanna Mather
The Australian Financial Review – Page: B3 : 3-Apr-19

The April 2019 Budget includes some $302m worth of tax relief over the next decade, including the $144m tax package announced in 2018. Individuals will benefit from an immediate increase in the low- to middle-income tax offset, with the tax cut to be available when they lodge tax returns for 2018-19. The 32.5 per cent income tax bracket will be reduced to 30 per cent from 1 July 2024, and an estimated 70 per cent of taxpayers will be in this bracket. Just six per cent will pay the highest marginal tax rate of 45 per cent from mid-2024.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY

Tax cuts key as economy struggles

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Original article by Adam Creighton, David Uren
The Australian – Page: 4 : 13-Mar-19

The Commonwealth Bank’s chief economist Michael Blythe says the federal government should use its April 2019 Budget to announce more aggressive tax cuts than previously flagged. His view is backed by AMP’s Shane Oliver, who has called for tax cuts worth $6bn for people on low and middle incomes. Blythe has also disputed claims of a ‘per capita’ recession, arguing that key economic indicators suggest otherwise. He adds that despite lower GDP growth in 2018, real net national disposable income per capita increased by 2.1 per cent.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AMP CAPITAL INVESTORS LIMITED, UBS HOLDINGS PTY LTD, AUSTRALIA. DEPT OF THE TREASURY, RESERVE BANK OF AUSTRALIA

ALP goads seniors: vote against us

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Original article by Simon Benson, Joe Kelly
The Australian – Page: 1 & 4 : 31-Jan-19

Analysis of tax data shows that Labor’s proposal to abolish cash refunds for excess dividend imputation credits would affect up to eight per cent of electors in the 10 most marginal federal seats. It is estimated that they would lose an average of $2,700 as a result of the policy. However, shadow treasurer Chris Bowen says Labor will press ahead with the policy if it wins the upcoming election. He has also suggested that self-funded retirees should vote against Labor if they are concerned about the policy, prompting Treasurer Josh Frydenberg to accuse him of arrogance.

CORPORATES
AUSTRALIAN LABOR PARTY, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN TAXATION OFFICE, NATIONAL SENIORS AUSTRALIA LIMITED, SMSF ASSOCIATION, LLOG EXPLORATION COMPANY, AUSTRALIA. PARLIAMENTARY BUDGET OFFICE

Dividend credit refunds distort economic system

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Original article by Michael Roddan
The Australian – Page: 19 & 26 : 24-Jan-19

Professor Kevin Davis from the University of Melbourne has expressed support for Labor’s plan to abolish cash refunds for excess dividend imputation credits. He says that dividend imputation was intended to prevent the double taxation of corporate profits, and providing franking credit refunds for investors who do not pay tax has resulted in a "significant economic distortion". Meanwhile, the University of Sydney’s Andrew Ainsworth says retail investors may be engaging in short-term trading to receive franking credit refunds.

CORPORATES
AUSTRALIAN LABOR PARTY, UNIVERSITY OF MELBOURNE, UNIVERSITY OF SYDNEY, AUSTRALIA. PARLIAMENTARY BUDGET OFFICE, GRATTAN INSTITUTE, RESERVE BANK OF AUSTRALIA

PM’s cash splash for oldies

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Original article by John Kehoe
The Australian Financial Review – Page: 1 & 9 : 24-Jan-19

Sources within the federal government have indicated that it may offer pre-election sweeteners to age pensioners and families in the form of one-off cash payments. The potential measure is said to be aimed at ensuring that people who will not directly benefit from the government’s income tax cuts package are not disadvantaged. The first stage of the tax package took effect at the start of 2018-19, but Labor has committed to scrapping the second and third stages it wins the 2019 election.

CORPORATES
AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIAN LABOR PARTY, AUSTRALIA. DEPT OF THE TREASURY

Budget surplus on track, says Frydenberg

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Original article by Lucas Baird
The Australian Financial Review – Page: 5 : 23-Jan-19

Treasurer Josh Frydenberg remains confident that the federal government will return the Budget to surplus in 2019-20. This is despite domestic and global headwinds, including the International Monetary Fund’s latest downgrade of its global economic growth forecast. Frydenberg also used a Sydney Institute speech to warn that the domestic economy cannot afford Labor’s proposed $200bn package of tax increases. He added that unlike Labor, the Coalition will increase health, education and infrastructure spending without increasing taxes.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, INTERNATIONAL MONETARY FUND, SYDNEY INSTITUTE, AUSTRALIAN LABOR PARTY

Bowen touts $200b tax hike buffer

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Original article by John Kehoe
The Australian Financial Review – Page: 1 & 4 : 23-Jan-19

Shadow treasurer Chris Bowen identifies Australia’s high level of household debt and low wages growth as key issues that concern him. Bowen adds that Labor’s proposed $200bn package of tax increases is necessary to provide the nation with a "fiscal buffer" in the event of a global economic downturn. He has also defended Labor’s plan to direct the bulk of tax relief to low- and middle-income earners, arguing that they tend to spend more than people on high incomes. Bowen has also downplayed fears that Labor’s negative gearing reforms would have an adverse effect on residential property values.

CORPORATES
AUSTRALIAN LABOR PARTY, AUSTRALIA. DEPT OF THE TREASURY, INTERNATIONAL MONETARY FUND

Tax strike on Airbnb, Uber users

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Original article by Simon Benson
The Australian – Page: 1 & 4 : 23-Jan-19

The federal government is planning a tax crackdown on the 11 million Australians who earn income from platforms such as Uber and Airbnb. It is estimated that income from shared-economy platforms now totals around $15bn a year, but at present the Australian Taxation Office is not able to determine the extent of underpayment or non-payment of tax on such income. The government proposes the introduction of a mandatory tax liability reporting regime for people who work in the shared economy. It will release a discussion paper on the issue on 23 January.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, UBER AUSTRALIA PTY LTD, AIRBNB AUSTRALIA PTY LTD, AUSTRALIAN TAXATION OFFICE, AIRTASKER PTY LTD, DELIVEROO AUSTRALIA PTY LTD, UBER EATS

Trust tax to ‘hit Labor’s backyard’

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Original article by Adam Creighton
The Australian – Page: 2 : 18-Jan-19

Treasurer Josh Frydenberg claims that about 300,000 small businesses with turnover of up to $10 million would be affected by Labor’s proposal to impose a 30 per cent tax on the distributions of family trusts. The Treasury’s analysis of tax office data shows that the Greens-held seat of Melbourne Ports and the Labor seat of Adelaide would be hardest-hit by the policy, although the Coalition holds six of the 10 seats that would be impacted the most. Shadow treasurer Chris Bowen contends that 98 per cent of taxpayers would not be affected by the policy.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN TAXATION OFFICE, AUSTRALIAN LABOR PARTY, AUSTRALIAN GREENS, BDO AUSTRALIA LIMITED

Dividends paid early to beat ALP

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Original article by Eli Greenblat
The Australian – Page: 1 & 2 : 16-Jan-19

Jason Steed of Morgan Stanley expects some listed companies to announce share buybacks and special dividends prior to the federal election, in order to avoid Labor’s proposed changes to the franking credits system. Mirrabooka Investments has already advised that its special dividend will be paid immediately rather than on 1 July, with CEO Mark Freeman attributing the move to uncertainty regarding Labor’s policy. Liberal MP Tim Wilson notes that many companies have told a parliamentary committee that they have changed their investment strategy in anticipation of Labor’s policy.

CORPORATES
MORGAN STANLEY AUSTRALIA LIMITED, AUSTRALIAN LABOR PARTY, MIRRABOOKA INVESTMENTS LIMITED – ASX MIR, LIBERAL PARTY OF AUSTRALIA, CITIGROUP PTY LTD, CALTEX AUSTRALIA LIMITED – ASX CTX, HARVEY NORMAN HOLDINGS LIMITED – ASX HVN, RIO TINTO LIMITED – ASX RIO, METCASH LIMITED – ASX MTS, WOOLWORTHS GROUP LIMITED – ASX WOW