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Prime Minister Scott Morrison has called the federal election for 18 May, leaving five weeks for the major parties to push their tax policies across.
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Election called: The big-ticket items for tax, accountants
11 April 2019
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Mr Morrison said that the election would be a “choice” for voters to choose between a strong economy or “Bill Shorten’s Labor Party”.
“It is a choice that will determine the economy that Australians live in, not just for the next three years but for the next decade,” Mr Morrison said.
“It’s a choice between a government that I lead and the alternative of a Labor government led by Bill Shorten.
“You will have a choice between a government that is lowering taxes, for all Australians, or Bill Shorten’s Labor Party that will impose higher taxes that will weigh down our economy.”
Some of the policies put forward by Labor will affect accountants and their clients directly, including its plan to cap deductions for the cost of managing tax affairs to $3,000.
Labor will also limit negative gearing to new investments from 1 January 2020, with the CGT discount to be halved to 25 per cent for investments entered into after 1 January 2020.
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In his budget reply speech last week, opposition leader Bill Shorten reinforced his plans to put an end to cash refunds for excess dividend imputation credits.
While matching the government’s plan to give low- to middle-income earners a tax offset of $1,080, Labor will not back the government’s plan to introduce a mega 30 per cent tax bracket.
Small business clients who use discretionary trusts are also set to feel the pinch by Labor’s plan to introduce a minimum 30 per cent tax rate for discretionary trust distributions to adults.
Labor will also look to introduce the Australian Investment Guarantee, a 20 per cent immediate deduction of any new eligible asset worth more than $20,000, with the remaining 80 per cent depreciated over the effective life from the first year.
In comparison, the government has increased the instant asset write-off threshold to $30,000 and expanded it to medium-sized businesses with a turnover of up to $50 million.
Earlier this year, a straw poll by Accountants Daily found that less than one in five accountants believed that a Labor government would deliver better tax policies for Australia.
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