Australian Federal Budget

Annual updates and commentary on the Australian Federal Budget announcements.

A Practical Budget Summary

A Practical Budget Summary

(Reading time: 2 - 3 minutes)

A simple and practical summary of main changes involving majority of our clients.

Remember, at this stage these are just proposals and not yet law, which means things could change as legislation passes through parliament.

Cuts to personal income tax rates

Effective to start 1 July 2018

The government is proposing income tax cuts over seven years.

They’re proposing a new Low and Middle-Income Tax Offset (LMITO) to provide a tax cut of up to a maximum of $530 per year for those earning up to $125,333 pa from 1 July 2022.

From 1 July 2024, the government is proposing flat 32.5% tax bracket to all people with taxable incomes of $41,001 to $200,000 pa.

Extension of the small business instant asset write off

Proposed effective date: 1 July 2018

The government will extend the $20,000 instant asset write-off by a further 12 months to 30 June 2019 for businesses with aggregate annual turnover of under $10 million.

Small businesses will be able to immediately deduct purchases of assets costing less than $20,000 first used and installed ready for use by 30 June 2019.

Claiming tax deduction from super contributions?

Proposed effective date: 1 July 2018

The ATO will be cracking down on individuals who are claiming personal tax deductions on contributions without submitting a Notice of Intent which may result in no contribution tax being paid. It is a timely reminder to ensure the notice is provided.

SMSF rules to change

Proposed effective date: 1 July 2019

The government is proposing to increase the maximum number of allowable members in new and existing self-managed super funds from four to six.

For SMSFs with a history of good record-keeping and compliance, the annual audit requirement will change to a three-yearly requirement. This will apply to SMSFs with a history of three consecutive years of clear audit reports and that have lodged the fund’s annual returns in a timely manner.

Deductions denied for vacant land

Proposed effective 1 July 2019

The Government will deny deductions for expenses associated with holding vacant land. The Government says this is an integrity measure to address concerns that deductions are being improperly claimed for expenses, such as interest costs, relating to holding vacant land, where the land is not genuinely held for the purpose of earning assessable income.


Still have some questions?

These changes (if passed by the parliament) will be considered at your next progress meeting. If you’d like to discuss any of the budget details, get in touch to book an appointment or call directly on 02 9328 0876.



Article by Michal Bodi | Senior Financial Planner

General Disclaimer: This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. Please seek personal financial advice prior to acting on this information.