At 7:30pm tonight, Josh Frydenberg delivered his first budget announcing that the “budget is back in the black and Australia is back on track” and “for the first time in 12 years, our nation is again paying its own way”. The treasurer announced a forecast budget surplus of $7.1 Billion for 2019-20, $11 Billion for 2020-21, $17.8 Billion for 2021-22 and $9.2 Billion for 2022-23.

The treasurer announced that this budget builds on the government’s plan to strengthen the economy and that the budget does this in the following ways, without increasing taxes:

1. It restores Australia’s finances;
2. It strengthens our economy and creates more jobs;
3. It guarantees essential services like hospitals, schools and aged care, while tackling the cost of living.

Key Forecasts

• 2.25% GDP growth is expected for 2018-19, 2.75% for 2019-20 and 2020-21, and 3% for 2021-22, and 2022-23;
• 5% unemployment is expected for the 2018-19 to 2022-23 years.

Key Change for Small Business

The treasurer announced the following additional tax relief for small and medium business in this budget:

• From 1 July 2020, the 27.5% company tax rate will reduce to 26%;
• From 1 July 2021, the above tax rate will reduce further to 25%;
• From budget night until 30 June 2020, the instant asset write off threshold will increase from $25,000 to $30,000. This means that businesses with turnover less than $10m can immediately deduct the cost of eligible assets if they cost less than $30,000;
• From budget night until 30 June 2010, the above instant asset write off will be extended to businesses that turnover under $50m.

Key Changes for Individuals

The key budget announcements that impact on individuals are:

• For the current tax year ending 30 June 2019, the low and middle income tax offset (LMITO) will more than double from the current level of $530 to $1,080 for taxpayers earning up to $126,000 per year. Taxpayers earning between $48,000 and $90,000 will receive the full offset;
• From 1 July 2024, the 32.5% tax rate will be reduced to 30%;
• From 1 July 2022, the 19% tax bracket will end at $45,000 instead of $41,000.

Key Changes Relating to Superannuation

The government has announced the following superannuation changes:

• From 1 July 2020, the superannuation work test will only apply to individuals aged 67 and above. This means that individuals aged 65 and 66 will be able to contribute to superannuation if they are not working;
• From 1 July 2020, individuals aged 65 and 66 will be able to bring forward 3 year’s worth of non-concessional contributions (currently capped at $100,000 per year). Currently this is only available to individuals aged under 65;
• From 1 July 2020, the age limit for making spouse contributions and receiving a tax offset of up to $540 will increase from 69 to 74.

ABN Holders

The following announcements were made to make ABN holders accountable for meeting their obligations:

• From 1 July 2021, ABN holders with an income tax return obligation will be required to lodge their return;
• From 1 July 2022, ABN holders will be required to confirm the accuracy of their details annually on the Australian Business Register.