There’s a lot of hype at the moment as the legislative
calendar gets into full swing in the Senate. Recently the government
successfully repealed the Mining Tax, which has come with a series of
concessions.
So what does that mean for you? Without the politics
and media beat-up we want to get to the bottom line and let you know how this
will affect you.
Mining Tax Repealed
The
Mining Tax is officially titled the ‘Minerals Resource Rent Tax’ and was passed
into law by the previous government in 2012. This Bill was largely
controversial due to the Australian economy’s heavy dependency on the mining
sector.
To
repeal the tax however, the Government have had to make some compromises.
How will this
affect me financially?
1. Another
change in the superannuation guarantee schedule
2. Associated
tax measures affected
3. A
range of spending measures have been retained for lower income earners
What does that
mean?
First
of all, don’t take all the hype at face value. An individual’s superannuation
is NOT being frozen. All that is being frozen is the percentage which employers
must pay into employee’s superannuation, which is being held at 9.5% until
2021.
Several
changes to the superannuation guarantee schedule have been proposed in the
past. Below is a table outlining approved, proposed and denied schedules *CSG =
Compulsory Superannuation Guarantee.
Financial Year
|
CSG Current
|
CSG Proposed and defeated 2013
|
CSG Proposed in 2014/15
Federal Budget
|
CSG Proposed and passed by
Senate Sep 2014
|
2012/13
|
9%
|
9%
|
9%
|
N/A
|
2013/14
|
9.25%
|
9.25%
|
9.25%
|
N/A
|
2014/15
|
9.5%
|
9.25%
|
9.5%
|
9.5%
|
2015/16
|
10%
|
9.25%
|
9.5%
|
9.5%
|
2016/17
|
10.5%
|
9.5%
|
9.5%
|
9.5%
|
2017/18
|
11%
|
10%
|
9.5%
|
9.5%
|
2018/19
|
11.5%
|
10.5%
|
10%
|
9.5%
|
2019/20
|
12%
|
11%
|
10.5%
|
9.5%
|
2020/21
|
12%
|
11.5%
|
11%
|
9.5%
|
2021/22
|
12%
|
12%
|
11.5%
|
10%
|
2022/23
|
12%
|
12%
|
12%
|
10.5%
|
2023/24
|
12%
|
12%
|
12%
|
11%
|
2024/25
|
12%
|
12%
|
12%
|
11.5%
|
2025 and beyond
|
12%
|
12%
|
12%
|
12%
|
Other Tax Measures
Affected
As with
most Bills that pass through both houses of government, there are often other
things linked to it. For example the Mining Tax included loss carry back rules,
instant asset write off plus simplified depreciation and accelerated deduction
for motor vehicles will be affected.
Alright
enough accounting ‘geek-speak’ and terminology what does it all mean for you?
In some cases it’s really all a bit complicated, but basically the rules of
what can be claimed and in what financial period they can be claimed have
changed. Fortunately, the rules aren’t retroactive, meaning you won’t be taxed
for 2013 but from 2014 the new rules apply.
