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Hard decisions are off the table but not all is lost, says an accounting body.
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CA ANZ names top 10 budget quick fixes
29 March 2022
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The looming election means this budget will contain little bad news, said CA ANZ, but a 10-point hit list shows what could be done.
- Replace the annual superannuation cap with a lifetime contribution cap and provide for joint spousal super accounts.
“The superannuation ‘glass ceiling’ is real, and these two steps could go a long way to making things fairer for women, allowing them to make more contributions later in life,” said CA ANZ group executive advocacy and international Simon Grant.
- Make pay as you go more accurate so low-income earners aren’t unfairly penalised and get to realise more of their take-home pay earlier.
“Single Touch Payroll is now accurate enough to ensure that lower income workers and those in casual or insecure jobs have as ‘real’ of a reflection of their take-home pay across their different employers as possible,” Mr Grant said.
- Extend the low and middle-income tax offset and instant asset write-off provisions.
“The LMITO maintains balance to the tax system while broader reform can be worked through – and provides support to working Australians that need it most,” Mr Grant said.
- Make the loss carry back provision permanent.
“It’s a great way to continue stimulating productive investment,” Mr Grant said.
- Make the “temporary” shortcut method of claiming work-from-home expenses permanent.
“Flexible and working from home arrangements – wherever those might be – are now standard and the tax system needs to recognise this permanently,” Mr Grant said.
- Introduce a domestic GST electronic platform rule such as the one that applies to foreign electronic platforms.
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“While domestic companies pay GST, domestic online platforms don’t have the same rules in place to ensure GST is captured in all sales, which is an unfair advantage,” Mr Grant said.
“This is an easy fix to ensure we are minimising leakage from the system, and also that different company structures aren’t unfairly penalised.”
- Release draft legislation to fix the “Backpacker Tax” and announce new arrangements for working holidaymakers.
“New legislation to respond to the recent High Court decision that the ‘backpacker tax’ contravened non-discrimination rules is needed – and our rural members are telling us businesses need certainty to employ working holiday-makers,” Mr Grant said.
- Increase rental assistance for older Australians.
“One of our major concerns is about retired single people with minimal assets or income other than the pension or that receive rental assistance,” Mr Grant said.
“Many of these people – mostly women – are struggling with the cost of living and are under strained circumstances.”
- Implement Board of Taxation recommendations on small-business CGT concessions.
“Many viable businesses have been doing it tough due to Covid. As official lockdowns have ended more are needing to either restructure their operations or sell part or all of their business,” Mr Grant said.
“By accepting the BoT’s review of small business tax concessions it will be easier for SMEs to take the steps they need, as well as get the country back on normal ‘insolvency’ footing, with many zombie companies out there.”
- Abolish the Tourist Refund Scheme.
“Australia is the only country that allows citizens and residents to participate in a tourist refund scheme, and it has significant non-compliance and revenue leakage,” Mr Grant said.
“Let’s knock that inconsistency on the head and save the budget more than $100 million per year.”
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