Federal Budgets Part 2

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Here is some of the other items annouced in the 2011 federal budget on 11/05/2010

GOOD

Previously announced tax cuts

The Government has confirmed it will deliver its third round of tax cuts. Under these previously announced cuts, from 1 July 2010:

    * The Low Income Tax Offset will increase from $1,350 to $1,500 (This will allow Australians to earn up to $16,000 and not pay income tax)
    * The 30 per cent rate threshold will increase from $35,000 to $37,000
    * The 38 per cent marginal tax rate will decrease to 37 per cent, and
    * The amount of income a senior Australian eligible for the Senior Australian Tax Offset (SATO) can earn before they pay income tax or the Medicare Levy will increase from $29,867 to $30,685 for singles, and from $25,680 to $26,680 for each member of a couple.


Increasing the Medicare levy low-income thresholds

The Government will increase the Medicare low-income thresholds to $18,488 for individuals and $31,196 for families, with effect from 1 July 2009. The additional amount of threshold for each dependent child or student will also increase to $2,865.

Company tax rate

    * For small businesses, the company tax rate will be reduced to 28% and be implemented from 2012-13 (as noted in the Government response to the Henry Review), with a stepped reduction for other companies (29% in 2013-14 and 28% in 2014-15).




BAD

Increasing the Medical expenses tax offset threshold

The net medical expenses tax offset currently allows taxpayers to receive a tax offset equal to 20 per cent of net unreimbursed eligible medical expenses above $1,500. The claim threshold is not currently indexed and was last increased in the 2002-03 income year.

The Government intends to increase the threshold for taxpayers claiming the net medical expenses tax offset from $1,500 to $2,000 and commence annually indexing the threshold to the Consumer Price Index, with effect from 1 July 2010.

NOTE: The first indexation adjustment to the threshold will take place on 1 July 2011.