02 9683 5999Federal Treasurer, Wayne Swan handed down the 2012 Federal budget, the fifth for the Labor government. The government is budgeting for a surplus of $1.5 billion for the 2012-13 year, which is an historic budget turnaround from the $44 billion deficit recorded in the 2011-12 year.
Underlying the budget assumptions are lower revenue forecasts, a real GDP growth of 3.3% considering the European debt crisis and the strong Australian Dollar. Unemployment is expected to increase slightly to 5.5% in the non-mining sector. Government sector net debt is expected to be $142.5 billion or 9.6% of GDP.
The main budget highlights are as follows:
PERSONAL INCOME TAX
SUPERANNUATION
Increase in Super Contribution Thresholds – As announced in the 2011 budget, workers who are aged 50 years or older who have a superannuation balance of less than $500,000 will have their concessional contributions cap increased by $25,000 above the general concession cap. This measure was originally to be effective from 1 July 2012 but has been deferred for two years to 1 July 2014. T his was brought in to replace the transitional cap for workers aged 50 years or older which expires on 30 June 2 012. As a result all individuals will have a concessional contributions cap of $25,000 for the 2013 and 2014 years.
Businesses to be allowed to carry-back losses – The proposed changes will allow companies to carry back their losses to offset past profits and get a refund of tax previously paid on that profit. The carry-back will be available to companies and entities taxed as companies (not trusts or other entities). From 1 July 2012 companies will be able to carry-back up to $1 million worth of losses and for the 2013-14 and later years, tax losses can be carried back and offset against tax paid for up to 2 years earlier.
Companies with in excess of $1 million in carried forward losses will be able to access a maximum cash benefit of $300,000. The rebate will be subject to the balance of the company’s franking account not becoming negative.
