2011-2012 Federal Budget Summary

On Tuesday 10 May, the Deputy Prime Minister and Treasurer, Wayne Swan MP, delivered the federal government’s 2011-2012 Budget.

Compared with previous years, the 2011 Federal Budget was relatively mild; with few surprises or major changes. The Gillard Government, handing down its first Budget, confirmed a range of previously announced tax, super and social security policy changes.

Note: Unlike previous years, this Budget was delivered by a minority Government that may find it more difficult than usual to get some of these measures through both Houses of Parliament.

Summary

The key announcements include:

• Unlike in previous years there have been no changes made to the personal tax thresholds or rates.
• Those who exceed their concessional contribution caps for the first time by less than $10,000 will be able to avoid paying excess contributions tax.
• People aged 50 and over with less than $500,000 in super will be able to contribute an extra $25,000 in pre-tax dollars each year.
• The 50% pension minimum drawdown relief will be reduced to 25% in 2011/12 and will return to normal levels from 1 July 2013.
• People under 18 will no longer be able to access the low income tax offset to reduce tax payable on unearned income such as dividends, interest and rent.
• Lower income earners will receive a greater proportion of the low income tax offset through their pay packets.
• Fringe benefits tax on salary packaged cars will be simplified to a single rate of 20%.

Below is a link to a summary version of the measures announced:

client_tools/latest_news/bdh___co_newsletters/2011_federal_budget

 Below is a link to a comprehensive summary of the tax and superannuation measures announced in the 2011-2012 Federal Budget:

http://www.charteredaccountants.com.au/Industry-Topics/Tax/Current-issues/Federal-budget/News-and-updates/~/media/Files/Industry%20topics/Tax/Current%20Issues/Federal%20budget/Weekly%20Tax%20Bulletin%20Special%20Budget%20Report%202011ICAA.ashx