Henry Report

[Angel]

CGT and negative gearing: see 14 and 17c

ATTACHMENT

In the interests of business and community certainty, the Government advises that it will not implement the following policies at any stage. Some of these are recommendations of the Australia’s Future Tax System review, some are potential mis-interpretations of the recommendations.
•
Include the family home in means tests (see Rec 88c)
•
Introduce land tax on the family home – this is a state tax and thus an issue for the states (see Rec 52 & 53)
•
Require parents to work when their youngest child turns 4 (see Rec 85)
•
Hit single income families (see Rec 92 & 93)
•
Restrict eligibility to rent assistance for families (see Rec 103)
•
Do any changes to the tax system that harm the not-for-profit sector, including removing the benefit of tax concessions, raising the gift deductibility threshold or changing income tax arrangements for clubs (see Rec 9e, 13, 41, 43 & 44)
•
Reduce overall remuneration to the members of our defence forces (see Rec 6d, 8c & 9e)
•
Reduce the CGT discount, apply a discount to negative gearing deductions, or change grandfathering arrangements for CGT (see Rec 14 & 17c)
•
Remove the Medicare levy (see part of Rec 5)
•
Reduce indexation of the age pension (see Rec 84)
•
Remove the benefits of dividend imputation (see Rec 37)
•
Think of hitting pensioner and low income concessions for utilities, transport and other essential services (see Rec 107)
•
Introduce a bequests tax (see Rec 25)
•
Align preservation age with pension age (see Recommendation in AFTS Retirement income strategic issues paper)
•
Offer a government annuity product (see Rec 22)
•
Ask the States to charge market rents to public housing recipients (see Rec 106)
•
Abolish the Luxury car tax (see Rec 80)
•
Index fuel tax to CPI (see Rec 65)
•
Change alcohol tax in the middle of a wine glut and where there is an industry restructure underway (see Rec 71)
The Government also reaffirms that it will never increase the rate or broaden the base of the GST or remove tax free superannuation payments for the over 60s, which were both ruled out of the AFTS Terms of Reference.

 

[Token Funder]

ATTACHMENT

In the interests of business and community certainty, the Government advises that it will not implement the following policies at any stage. Some of these are recommendations of the Australia’s Future Tax System review, some are potential mis-interpretations of the recommendations.
•
Include the family home in means tests (see Rec 88c)
•
Introduce land tax on the family home – this is a state tax and thus an issue for the states (see Rec 52 & 53)
•
Require parents to work when their youngest child turns 4 (see Rec 85)
•
Hit single income families (see Rec 92 & 93)
•
Restrict eligibility to rent assistance for families (see Rec 103)
•
Do any changes to the tax system that harm the not-for-profit sector, including removing the benefit of tax concessions, raising the gift deductibility threshold or changing income tax arrangements for clubs (see Rec 9e, 13, 41, 43 & 44)
•
Reduce overall remuneration to the members of our defence forces (see Rec 6d, 8c & 9e)
•
Reduce the CGT discount, apply a discount to negative gearing deductions, or change grandfathering arrangements for CGT (see Rec 14 & 17c)
•
Remove the Medicare levy (see part of Rec 5)
•
Reduce indexation of the age pension (see Rec 84)
•
Remove the benefits of dividend imputation (see Rec 37)
•
Think of hitting pensioner and low income concessions for utilities, transport and other essential services (see Rec 107)
•
Introduce a bequests tax (see Rec 25)
•
Align preservation age with pension age (see Recommendation in AFTS Retirement income strategic issues paper)
•
Offer a government annuity product (see Rec 22)
•
Ask the States to charge market rents to public housing recipients (see Rec 106)
•
Abolish the Luxury car tax (see Rec 80)
•
Index fuel tax to CPI (see Rec 65)
•
Change alcohol tax in the middle of a wine glut and where there is an industry restructure underway (see Rec 71)
The Government also reaffirms that it will never increase the rate or broaden the base of the GST or remove tax free superannuation payments for the over 60s, which were both ruled out of the AFTS Terms of Reference.

That's a relief. Obviously, if the government of the day rules out tax changes so clearly, we can remain assured all will be well.

Oh, hang on...

[Howard] issued a four-sentence statement saying, "Suggestions I have left open the possibility of a GST are completely wrong. A GST or anything resembling it is no longer Coalition policy. Nor will it be policy at any time in the future. It is completely off the political agenda in Australia." Later that day, confronted by a clamouring press pack, he compounded the lie. Asked if he'd "left the door open for a GST", Howard said: "No. There's no way a GST will ever be part of our policy."

Q: "Never ever?" Howard: "Never ever. It's dead. It was killed by voters at the last election."

 

[coastymike]

I can't see how a resource tax is going to help. The large miners go to the negotiation table with increased prices to offset the tax. China says get stuffed we will source from Canada and Brazil and wait until the Indian mines go online in 2013-2015 for the extra resources. Australia loses. The coalition will block this and the reforms will go nowhere. Sir Humphrey would consider this a good response to the review as nothing will get done. Back to normal.

 

[Fudge]

So after reading the reports, it seems as though nothing has changed? (I mean nothing has changed for the PI?)

I will have to read it when I get a chance, but they have been touting that there will be huge changes.

I don't see them in the main bulletins. (apart from the extortionate mining tax)

F

 

[Player]

Looks tame enough at face level for our cohort, however I'll wait till the budget Swansong is delivered before I start yipee kayaing.

 

[Ruddprime]

So after reading the reports, it seems as though nothing has changed? (I mean nothing has changed for the PI?)

I will have to read it when I get a chance, but they have been touting that there will be huge changes.

I don't see them in the main bulletins. (apart from the extortionate mining tax)

F

Rudd's wimped out.

There are some heavy recommendations by Henry though. CGT, Rental Income, Land Tax, and negative gearing included.

 

[Africandaisy]

ATTACHMENT

In the interests of business and community certainty, the Government advises that it will not implement the following policies at any stage.

•Reduce the CGT discount, apply a discount to negative gearing deductions, or change grandfathering arrangements for CGT (see Rec 14 & 17c)

Well, this is a pleasant surprise. I was a bit anxious that the government might feel obliged to 'do something' to address allegations that investors are driving up property prices.

The Herald Sun also said that 'The review proposes a 40 per cent discount on all income from savings, as well as on all residential rental income and losses, and capital gains.'

I'm not exactly sure what that means or whether the government has indicated whether it will do this, but it sounds promising.

 

[coastymike]

I think the discount was tied to changes to negative gearing and the government has indicated that there will be no changes to negative gearing so they might discount the savings on taxation but rental income won't be touched as this would effectively reduce the amount that could be geared as well unless they want to keep the gearing level but reduce the rent assessed. Now that would be awesome but not going to happen.

 

[Ruddprime]

Well, this is a pleasant surprise.

It's a pathetic response Rudd.

more than 130 Henry recommendations, very very good policy for the country and and Rudd agrees on less than a handful of them.


PATHETIC, PATHETIC, PATHETIC


Edit: Although one reason why the Rudd government has ignored all the recommendations that would restore some sanity to australia's housing market is the pending COAG review. It makes sense to look at both Henry's and the COAG's recommendations together to form policy.

 

[HiEquity]

I can't see how a resource tax is going to help. The large miners go to the negotiation table with increased prices to offset the tax.

I very much doubt it. My amateur view of this is the large miners are already creaming the market for as much as humanly possible. They do know that if they increase their prices still further they will lose business. This tax only applies when they are massively raking it in so I can't see it killing anything.

(apart from the extortionate mining tax)

An estimated $5.6bn in tax over 10 years for the whole Australian mining industry. That would be "a drop in the ocean..." instead of extortion.

 

[Fudge]

An estimated $5.6bn in tax over 10 years for the whole Australian mining industry. That would be "a drop in the ocean..." instead of extortion.

True, but 40% tax! no wonder the oppostition are running with this one.

F

 

[Sunfish]

An estimated $5.6bn in tax over 10 years for the whole Australian mining industry. That would be "a drop in the ocean..." instead of extortion.

If there's a knee-jerk sell off of the big diversified miners I might have some. Not FMG though.

It's May Day here tomorrow but I assume you southerners are going to work?

 

[Player]

Not the full thousand pages, however, here's a link with more guts to said Review:

http://www.cch.com.au/AU/MarketingP...PageTitle=CCH-Henry-Review-Report-2010&ID=263

 

[Player]

If there's a knee-jerk sell off of the big diversified miners I might have some..........

Some negative herd sentiment would be nice to add to the current pull-back and optimise the accumulation process.

The US also finished lower on Fri and, so a likely chance that we shall follow suit tomorrow.

Don't forget Mr. Fish, that the ASX isn't based in your paradise in FNQ.....no public holiday for the stocks tomorrow..happy shopping

 

[tubs]

I can't see how a resource tax is going to help. The large miners go to the negotiation table with increased prices to offset the tax. China says get stuffed we will source from Canada and Brazil and wait until the Indian mines go online in 2013-2015 for the extra resources. Australia loses. The coalition will block this and the reforms will go nowhere. Sir Humphrey would consider this a good response to the review as nothing will get done. Back to normal.

Or more to the point the coalition will block it and Rudd will go to the next election saying the coalition are holding up changes that will give people more super and a better retirement.

Question is, will Tony fall for it? My guess is yes he will.

 

[warrenkh]

re

I heard that from ABC radio this morning, that larger mining projects in Australia arleady have similar taxes. E.g. the Gorgon Gas project would already be taxed at 40%. So in effect the changes would not affect the larger projects anyway.

Warrenkh.2010

 

[steveadl]

I heard that from ABC radio this morning, that larger mining projects in Australia arleady have similar taxes. E.g. the Gorgon Gas project would already be taxed at 40%. So in effect the changes would not affect the larger projects anyway.

Warrenkh.2010

BHP believe it will increase their effective tax paid on Australian operations from 43% currently to around 57%.

I didn't realise it was already that high, but it's still a further significant increase.

 

[forumite]

Well, this is a pleasant surprise. I was a bit anxious that the government might feel obliged to 'do something' to address allegations that investors are driving up property prices.

I am a bit anxious too. But looking back, the response is not unexpected considering the Rudd government is very risk-averse and will not embark on anything whose outcomes are politically-sensitive and uncertain.

 

[gg1965]

But looking back, the response is not unexpected considering the Rudd government is very risk-averse and will not embark on anything whose outcomes are politically-sensitive and uncertain.

People may say that Rudd wimped out, but do you think Abbot would make the same hard decisions if the positions were reversed?

True tax reform is a sticky issue and i don't think any of the current crop have the guts to make those decisions. They may sound strong in opposition, but when they become leaders, they still look as far ahead the next election and still make risk averse decisions.

Politics in Australia has gotten very boring and very predictable.


g

 

[forumite]

People may say that Rudd wimped out, but do you think Abbot would make the same hard decisions if the positions were reversed?

Abbott is an opportunist and cannot be trusted.