1. PERSONAL TAX CUTS

The government announced a further reduction in tax by increasing the non-refundable low and middle income tax offset (LMITO).

The reduction in tax provided by LMITO will increase from a maximum amount of $530 to $1,080 per year. It will be received on assessment after individuals lodge their tax returns, commencing from 1 July 2019 at the following rates:

• Taxable income $37,000 or less – maximum of $255
• Taxable income $37,000 to $90,000 – maximum of $1,080
• Taxable income $90,000 to $126,000 – $1,080 less 3 cents for each dollar above $90,000

2. INSTANT ASSET WRITE-OFF EXTENDED AND THRESHOLD INCREASED

Small businesses, categorised as those with an annual turnover of less than $10 million will be able to immediately deduct purchases of eligible assets costing less than $30,000 from the night of 2 April 2019 to 30 June 2020.

For the 2019 financial year, there are three periods of instant asset write-off thresholds:

• 1 July 2018 to 28 January 2019 – less than $20,000
• 29 January 2019 to the day of 2 April 2019 – less than $25,000
• The night of 2 April 2019 to 30 June 2019 – less than $30,000

Small businesses can continue to place assets which cannot be immediately deducted into the small business simplified depreciation pool and depreciate those assets at 15% in the first income year and 30% each income year thereafter. The pool balance can also be immediately deducted if it is less than the applicable instant asset write-off threshold at the end of the income year (including existing pools).

The write-off has been extended to medium sized businesses, categorised as those with an annual turnover of $10 million or more but less than $50 million. These businesses will be able to immediately deduct purchases of eligible assets costing less than $30,000 that are first used, or installed ready for use, from the night of 2 April to 30 June 2020.

The instant asset write-off threshold may be employed on multiple depreciating assets. Artworks may be eligible for the instant asset write-off under certain circumstances.

3. EMDG SCHEME – EXTRA $60 MILLION IN FUNDING

The government will invest an additional $60 million in the export market development grant (EMDG) scheme over the next three years to help more businesses export their products and services around the world.

The EMDG scheme reimburses up to 50% of eligible export promotion expenses above $5,000 provided that the total expenses are at least $15,000. It provides up to 8 grants to each eligible application.

To be eligible, a business must have:

• income of not more than $50 million in the grant year;
• incurred at least $15,000 of eligible expenses under the scheme (first-time applicants can combine 2 years expenses); and
• principal status for the export business (some exceptions apply, such as non-profit export-focused industry bodies).

The business also must have promoted one of the following:

• the export of goods or most services;
• inbound tourism;
• the export of intellectual property and know-how;
• conferences and events held in Australia.

According to the government, last year over 3,500 small and medium enterprises accessed the EMDG scheme, employing almost 66,500 people and generating exports of $3.8 billion.

4. LIVE MUSIC GRANTS PROGRAM ANNOUNCED

The government announced a new grants program, budgeted at $22.5 million, to encourage small businesses to host live music.

Grants of up to $10,000 will be offered to encourage live music performances, not only in traditional venues but also in premises that currently only play background music to its patrons.

The grants will cover:

• Artist costs;
• Equipment purchases;
• Infrastructure; and
• Facility upgrades

Live music collecting society APRA AMCOS deserve congratulations for the way they engaged the Arts Ministry in relation to this innovative scheme, by commissioning export reports and working with hospitality and music industry groups.

One of their findings, which the grants program seeks to address, is that Australian businesses are willing to present live music but face two major hurdles – lack of venue expertise and finance to invest in the appropriate equipment.

According to APRA AMCOS:

‘It is clear live music provides a competitive advantage and stimulates increased consumption of food and beverage, encourages the night-time economy, promotes economic development across the nation for scores of hospitality and cultural workers, and provides work for emerging and established musical artists,’

The live music grants program will commence in 2020 and the funds will be allocated over four years.

5. CHANGES TO SUPERANNUATION

Individuals aged 65 and 66 will be able to make voluntary superannuation contributions from 1 July 2020 (both concessional and non-concessional) without needing to meet the contributions work test.

Currently, individuals aged 65-74 must work at least 40 hours in any 30-day period in the financial year in which the contributions are made (the “work test”) in order to make voluntary personal contributions.

The proposed extension of the work test exemption means that individuals aged 65 or 66 who don’t meet the work test, because they may only work one day a week or volunteer, will be able to make voluntary contributions to superannuation, giving them greater flexibility as they near retirement.

The proposed change will align the work test with the eligibility for the Age Pension, which is scheduled to reach age 67 from 1 July 2023.

The bring forward arrangements for non-concessional contributions will be extended to those aged 65 and 66. The bring forward rules currently allows individuals aged less than 65 years to make 3 years’ worth of non-concessional contributions (which are generally capped at $100,000 a year) in a single year.

Otherwise, the existing annual caps for concessional contributions and non-concessional contributions ($25,000 and $100,000 respectively) will continue to apply.

The age limit for making spouse contributions will be increased from 69 to 74. Currently, those aged 70 and over cannot receive contributions made by another person on their behalf.

Featured Artwork:
Chonggang Du
Intervention No.9, 2019
Charcoal, Chinese ink, acrylic, watercolour on canvas
50h x 50w cm
See more at Fox Galleries