The 2019-20 Federal Budget – what’s in it for you

This week’s Federal Budget was delivered firmly with the voting public in mind. As we inch closer to a Federal election the budget provided the Morrison Government with the opportunity to demonstrate its economic credentials and give the public compelling reasons to vote Liberal in a few weeks’ time.

Highlights of the 2019/20 budget include:

• Personal tax cuts – $19.5bn package of personal income tax cuts
• Small business – Instant asset write-off increased to $30k and expanded to businesses under $50m
• Infrastructure – $100bn in infrastructure projects across all States and Territories
• Regulators – $1bn ATO task force funding targeting multi-nationals and high net worth individuals

Over the next few days we’ll break down the key outcomes of the Budget for you, particularly those that are relevant to many of our clients and customers. These include the above as well as:

• Primary producers – Luxury car tax refunds increased
• Disaster response funding
• Small business – non-compliance changes and support in tax disputes

For part one, we’ll start with the announcement every employee enjoys: personal income tax cuts.

As anticipated, the Budget celebrated the anticipated surplus with a $19.5bn package of personal income tax cuts for Australian residents. This package revises the legislated seven-year income tax plan.

The personal tax changes mean a tax saving of $855 for someone on an annual taxable income of $45,000 per annum until 2022, then $1,080 until 2024 onwards (check the tax relief calculator).

This round of tax cuts:

• Increases the top threshold of the 19% personal income tax bracket to $45,000 from 1 July 2022
• Reduces the 32.5% marginal tax rate to 30% from 1 July 2024-25