The government have released their initial response to the Henry Review on the 2nd of May. Dr henry recommended 1) reducing the CGT discount, and 2) applying a discount to negative gearing deductions (Recommendations 14 and 17(c)), however these were rejected by the government.
Just as an FYI, the highlights of the reform are:
• a Resource Super Profits Tax that will tax non-renewable resource projects (at a rate of 40%) on their profits
rather than just their production (taxpayers will be eligible for a credit for royalties paid to State and Territory Governments)
- this will apply from 1 July 2012;
• a refundable tax offset (the Resource Exploration Rebate) at the company level, set at the prevailing company
tax rate, for exploration expenditure in Australia incurred on or after 1 July 2011;
• reduction in company tax rate to 28% - small businesses will benefit from 2012-13, but it will be phased in for
other companies (29% for 2013-14 and 28% from 2014-15);
• small businesses will be able to immediately write-off assets valued at under $5,000 (currently $1,000) and all
other assets (except buildings) will be written off in a single depreciation pool at a rate of 30% - this will apply from 1
July 2012;
• super contributions cap concession: workers aged 50 and over with super balances below $500,000 will be
able to make up to $50,000 in annual, concessional superannuation contributions - to apply from 1 July 2012;
• Superannuation Guarantee age limit will be increased from 70 to 75 from 1 July 2013;
• Superannuation Guarantee rate will rise to 12% by 2019-20 (to be phased in); and
• Government will provide a $500 annual superannuation contribution to individuals with an adjusted taxable
income up to $37,000.
Just as an FYI, the highlights of the reform are:
• a Resource Super Profits Tax that will tax non-renewable resource projects (at a rate of 40%) on their profits
rather than just their production (taxpayers will be eligible for a credit for royalties paid to State and Territory Governments)
- this will apply from 1 July 2012;
• a refundable tax offset (the Resource Exploration Rebate) at the company level, set at the prevailing company
tax rate, for exploration expenditure in Australia incurred on or after 1 July 2011;
• reduction in company tax rate to 28% - small businesses will benefit from 2012-13, but it will be phased in for
other companies (29% for 2013-14 and 28% from 2014-15);
• small businesses will be able to immediately write-off assets valued at under $5,000 (currently $1,000) and all
other assets (except buildings) will be written off in a single depreciation pool at a rate of 30% - this will apply from 1
July 2012;
• super contributions cap concession: workers aged 50 and over with super balances below $500,000 will be
able to make up to $50,000 in annual, concessional superannuation contributions - to apply from 1 July 2012;
• Superannuation Guarantee age limit will be increased from 70 to 75 from 1 July 2013;
• Superannuation Guarantee rate will rise to 12% by 2019-20 (to be phased in); and
• Government will provide a $500 annual superannuation contribution to individuals with an adjusted taxable
income up to $37,000.
