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At
http://www.abc.net.au/news/2016-04-24/turnbull-to-rule-out-negative-gearing-changes-in-may-budget/7353652
as viewed on 02 May 2016, was
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Malcolm Turnbull rules out negative gearing changes in May budget
Updated April 24, 2016 13:52:42
Prime Minister Malcolm Turnbull has ruled out any changes to negative gearing in the May budget.
Key points:
PM says Labor's negative gearing policy would discourage investment, raise rents, reduce home values
Treasurer says Government will not do anything to hurt confidence in economy
Labor disagrees, says their plan would support first home buyers
It follows a plan from Labor that would restrict negative gearing to new houses and grandfather existing investments from next year.
The Federal Opposition's plan has been heavily criticised by the Coalition since it was unveiled earlier this year, claiming it would impact on investor confidence and drive down the value of houses.
Mr Turnbull this morning confirmed there would be no changes to any aspect of the policy, after Treasurer Scott Morrison at one point earlier this year hinted there could be changes.
"The changes that Labor is proposing to negative gearing will devalue every home in Australia, that is what they are designed to do," Mr Turnbull said.
"What they will also do is jack up rents. Labor has got a trifecta; they want to discourage investment, jack up rents and reduce home values."
Mr Turnbull said he did not think Australians would be "a surprise to anybody, given the attacks, the criticisms we've made on Labor's reckless plan".
Mr Morrison said the Labor Party's plan would discourage "mum and dad investors", and in turn, confidence in Australia's economy.
"A tax on mum-and-dad investors is not a good plan for families, it's not a plan for growth and it's not a plan for jobs and that's why we will not have a bar of it," he said.
"The thing to remember about the value of your home is that when you have confidence in the value of your home, you have a confidence in this economy.
"It has been the householders of Australia, the mums and dads of Australia, that have been out there driving this economy through this very important transition we're going through — from the investment boom in the mining sector to this more diversified economy that we saw grow at 3 per cent last year.
"Labor's housing tax puts at risk the confidence of Australians in the value of their own home, which drives their confidence in this economy and that's why it's just a really, really bad idea.
'Mums and dads concerned for first home buyers'
Shadow treasurer Chris Bowen has argued Labor's plan would help put first home buyers back on a level playing field.
"I think mums and dads around the country will be deeply concerned that the Government of Australia has no plan to help their kids with housing affordability," he said.
"The level of first home buyers in Australia is the lowest it's ever been and the level of investors buying is the highest it's ever been. There's a link.
"Expert after expert, economist after economist, has recognised this. Malcolm Turnbull is out of touch, has his head in the sand and refuses to deal with it."
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http://www.abc.net.au/news/2016-04-25/negative-gearing-government-says-parents-will-suffer-under-labor/7354438
as viewed on 02 May 2016, was
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Negative gearing: Labor will 'punish mum and dad investors' with changes, Government says
AM By political correspondent Louise Yaxley
Updated April 25, 2016 10:45:01
The Federal Government is using its decision to leave negative gearing untouched to launch a campaign accusing Labor of "wanting to punish mum and dad investors".
Key points:
Coalition to leave existing negative gearing rules in place
Labor proposal to negatively gear only new properties criticised by Government
Think-tank says negative gearing tax benefits overwhelmingly favour the rich
The Opposition's plan would mean that from July next year, investors could only negatively gear new properties.
Yesterday the Coalition ruled out any changes to negative gearing even though Treasurer Scott Morrison indicated earlier this year he could target excesses in it.
Once Prime Minister Malcolm Turnbull announced there would be no change to the Coalition's negative gearing policy a social media campaign sprang up, including the message "Labor wants to punish mum and dad investors".
...
Benefits of negative gearing going to 'top 10 per cent'
Danielle Wood, a fellow at the Grattan Institute that supports abolishing negative gearing, said the focus on parents did not reflect the main users of the tax break.
"Our analysis shows that certainly there are some middle income earners that negatively gear but when you look at the distribution of tax benefits they overwhelmingly go to high-income earners, so about 50 per cent of the benefits of negative gearing are going to the top 10 per cent of income earners," she said.
Greens housing spokesman Scott Ludlam said the Government's decision to make no changes to negative gearing meant investors would get an advantage and potential first homebuyers would be locked out.
"If the Government cares about housing affordability it knows that negative gearing and capital gains tax exemptions are the place to start on the demand side," he said.
"Our proposal has been to wind back those unnecessary concessions and start ploughing some of the money into affordable housing and crisis support for people who are homeless.
"They are getting yelled at by the Property Council and a tiny handful of other industry groups who can't handle the idea that this artificial incentive for property speculation might get taken off the table and they've caved in."
Labor argues making new investors buy newly constructed property will increase the housing supply and boost affordability.
Prime Minister at odds with Grattan Institute
But Mr Turnbull's message is that it will drive down house prices.
"What Labor is proposing is a huge reckless shock to the market. This is not fine-tuning. This is a big sledgehammer they are taking to the property market," Mr Turnbull said.
Ms Wood disagreed, saying the Government was "strongly overstating" the effects of Labor's proposed changes and that scrapping the tax breaks would not have a major impact.
"Our numbers show that at most the impact would be about 2 per cent, so if you put that in context of growth in prices of about 7 per cent a year for the past 15 years it really is just a blip," she said.
"It makes it somewhat more affordable but again that effect can be overstated."
Ms Wood said abandoning negative gearing and the capital gains tax discount on profit could completely free up about $5 billion a year.
She said leaving it in place meant the Government had to find other revenue.
"If you leave these tax concessions in place that means that if you want to repair the budget you are going to have to raise more taxes elsewhere or you are going to have to cut spending if you are serious about doing something about the deficit," she said.
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http://www.abc.net.au/news/2016-05-02/how-many-politicians-negatively-gear-property/7371320
as viewed on 02 May 2016, was
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Negative gearing: How many federal politicians do it?
By Tom Lowrey
Updated May 02, 2016 09:43:41
Almost one in two federal politicians own an investment property, according to an analysis of their registers of interests.
The publicly available forms show that at least 97 federal members and senators, or their partners, own an investment property.
A handful own more than 10, while 50 MPs own more than two investment properties.
But as all sides of politics debate the merits of negative gearing - how many federal politicians are negative gearing their own investment properties?
It was an episode of the ABC's Kitchen Cabinet that prompted Melbourne-based Jan Dods to ask Curious Canberra how many federal politicians negatively geared property in Canberra.
"It's something I hadn't thought about but I was watching an episode of Annabel Crabb's Kitchen Cabinet where she was having lunch with Joe Hockey," she said.
"It came up that he rented rooms in his house [in Canberra] to other people.
"And I know Joe Hockey's family doesn't live in Canberra, so I thought, that's strange, he owns another house in Canberra and he's renting out rooms."
Jan began wondering how many politicians have investment properties - and whether that might influence their thinking on negative gearing.
"It came on that they need to save money with budgeting and things, and I thought, why don't they attack negative gearing?" she asked.
Finding the answer online – well, most of it
We have attempted to answer Jan's question as part of the Curious Canberra project.
But we have taken it a step further, trying to find out how many politicians negatively gear investment properties across the country.
The answer partly lies in the Register of Interests lodged by every federal parliamentarian, in the House of Representatives and the Senate all of which are available online.
Every politician has to list their real estate portfolio, and the purpose for which it is owned (residential, investment, commercial etc).
Data was collated from each politician, regarding how many properties they own with a listed purpose of "investment."
Going through the 225 documents was not a task we took on alone.
Nine people from across Canberra joined us for a fact-finding workshop at the National Film and Sound Archive, helping us search through thousands of pages of documents.
They scoured the register of interests for every member of the House of Representatives and Senate (except Joe Bullock, who has retired, and Pat Dodson, who was yet to be confirmed).
Documents were checked and double-checked, listing not only what real estate was initially declared – but the notifications of changes, in case property was bought or sold during an MP's term.
Federal MPs building property portfolios
The answer - 97 politicians and their spouses, from both houses and a range of parties, own a total of 215 investment properties.
That figure only includes those properties listed specifically as investments, and does not include commercial properties, holiday houses, or secondary properties in Canberra.
It also does not include Fairfax MP Clive Palmer, who owns a range of investment properties that cannot be accurately collated.
But how many are negatively geared?
The next step was to attempt to find out which of those 97 politicians were negatively gearing their investment properties.
The first approach was to directly contact MPs via email, to ask if their properties were negatively geared.
Seven responded saying yes - that at least one of their investment properties are negatively geared.
Seven MPs, all from the Coalition, gave a standard response stating that all information has been disclosed in their register of interests.
Eighteen MPs said that none of their investment properties are negatively geared, while 65 did not respond at all.
Aside from investment properties, the registers of interests reveal 49 MPs own residential properties within the ACT (excluding those members that represent ACT electorates).
According to the Department of Finance, all MPs are entitled to claim a travel allowance for time spent in the ACT for official duties, even if living in a property they own.
ATO data fills in some of the blanks
While our data is a long way from conclusive in assessing exactly how many MPs are negatively gearing properties, new research from the Australian National University (ANU) can provide a clearer answer.
The ANU assessed Australian Tax Office (ATO) data to try and determine who is using negative gearing tax breaks - including breaking the data down by occupation.
Of those who identified as "legislators", 13.87 per cent were negatively gearing properties.
Associate Professor Ben Phillips said he would expect negative gearing to be a little more common than that within federal parliament.
"Generally the federal politicians are the most highly paid politicians within Australia, so I would expect they'd be a little bit higher up the chain than your average legislator," he said.
"Given that local MPs - which would make up many of those numbers - would be significantly lower income persons."
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At
https://grattan.edu.au/report/hot-property/
as viewed on 02 May 2016, was
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Hot property: negative gearing and capital gains tax
by John Daley and Danielle Wood
Long overdue changes to negative gearing and capital gains tax would save the Commonwealth Government about $5.3 billion a year.
The interaction of a fifty per cent capital gains tax discount with negative gearing distorts investment decisions, makes housing markets more volatile and reduces home ownership.
The two measures in combination allow investors to reduce and defer personal income tax, at an annual cost of $11.7 billion to the public purse. Other taxes, which often drag more on the economy than a capital gains tax does, must be higher as a result.
And like most tax concessions, these tax breaks largely benefit the wealthy.
The capital gains tax discount should be reduced from 50 to 25 per cent, and negatively geared investors should no longer be allowed to deduct losses on their investments from labour income.
A smaller discount would save about $3.7 billion a year, while the change to negative gearing would raise $2 billion a year in the short term, falling to $1.6 billion as losses start to be written off against positive investment income.
The reforms would provide relief to the Budget in tough times and slightly improve housing affordability with little impact on how much people save. Property prices would be up to two per cent lower under these reforms than they would be otherwise.
Contrary to urban myth, rents won’t change much, nor will housing markets collapse. The effects on property prices would be small compared to factors such as interest rates and the supply of land.
The reforms should be phased in, to make them easier to sell and to prevent a rush of investors selling property before the changes come into force.
While other proposals, such as restricting negative gearing to new properties or limiting the dollar value of deductions, would improve the current regime, they nevertheless leave too many problems in place and introduce unnecessary distortions.
These two sensible reforms won’t hurt private savings much but will save the government a lot of money.
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http://www.smh.com.au/business/federal-budget/federal-budget-2016-top-earners-benefit-most-from-negative-gearing-grattan-institute-finds-20160425-goeef5.html
as viewed on 02 May 2016, was
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Federal budget 2016: Top earners benefit most from negative gearing, Grattan Institute finds
Date
April 25, 2016
Negative gearing to remain untouched
Who are the real winners with the government deciding not to touch negative gearing in the budget? Peter Martin explains.
Surgeons, anaesthetists, finance managers and lawyers will be the overwhelming beneficiaries of the Turnbull government's decision not to touch negative gearing in the budget, research shows.
Prepared by the Grattan Institute using Tax Office data, it finds that teachers, nurses, hairdressers and sales assistants are among those least likely to negatively gear. The top 10 per cent of earners collect almost half the negative gearing tax deductions and three-quarters of the concessionally taxed capital gains.
Shown to the government early, before its announcement on Sunday that it would leave negative gearing and capital gains tax concessions untouched, the Grattan Institute research finds the two concessions combined cost the budget $11 billion a year.
It endorses Labor's plan to cut the tax discount for capital gains from 50 per cent to 25 per cent and to restrict negative gearing deductions to non-wage income. Its plan differs from Labor's in that after a phase-in period existing investors would not be exempt and nor would those who invest in new properties.
The Grattan report, Hot property: negative gearing and capital gains tax reform, finds negative gearing reduces home ownership rates and, by encouraging turnover, reduces renters' security of tenure.
"Investors now account for more than half of new loans for housing, up from 29 per cent two decades ago," it says. "This is one reason (though by no means the only one) why rates of home ownership are falling among younger age groups."
Negative gearers need to keep switching properties to stop annual rent increases eating into their tax losses. About 80 per cent of all properties bought by negatively geared investors are sold within five years, compared with an industry average of 60 per cent.
The institute says that so generous is the combination of negative gearing and capital gains tax concessions that some negative gearers are able to pay less tax in total than if they hadn't geared at all, despite making profits on their investments. "In effect, they pay no tax on their profits, despite receiving a tax bonus," it says.
Prime Minister Malcolm Turnbull said on Sunday that Labor's plan would take a "sledgehammer" to property prices by taking one-third of the buyers out of the market. But the Grattan Institute says its plan would dent prices by less than 2 per cent and scarcely affect rents.
"Every time an investor sells a property to a renter, there is one less rental property, and one less renter. There is no change to the balance between supply and demand," it says. "Others may sell to another investor, but one that doesn't rely on negative gearing. Again, this doesn't reduce the number of rental properties."
Although Labor's plan to restrict negative gearing to investors in new housing would make little difference to housing supply, it could be worth doing "if it appeals to intuitions that tax benefits will produce more new housing, even if theory and history suggest that the effects will be small".
The institute says Australia is almost alone, along with New Zealand, in allowing rental losses to be deducted from ordinary wage income. The United States only allows deductions against other investment income, while Britain only allows deductions against capital gains from other rental properties.
The report's principal author, John Daley, said he was disappointed that the government wouldn't be changing the rules given the strength of the case for change, and also "somewhat bemused" by an example cited by the Prime Minister of a family that was negatively gearing to buy a property for their one-year-old daughter.
He asked: "What sort of country is it in which the only way you can expect to get into the housing market is if your parents start saving for you when you are aged one?"
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http://www.abc.net.au/news/2016-04-26/negative-gearing-malcolm-turnbull-income-irrelevant/7360532
as viewed on 02 May 2016, was
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High-income earners benefiting from property tax concessions 'beside the point', Malcolm Turnbull says
7.30 By political reporter Dan Conifer
Updated April 27, 2016 11:32:23
Prime Minister Malcolm Turnbull says the fact investment property tax concessions heavily benefit high-income earners is "beside the point", and Labor's plan to restrict deductions is "unjust".
Key points:
Top 10pc of earners get almost half all negative gearing tax benefits, receive two thirds of all capital gains income:
Grattan Institute
Institute wants to scrap negative gearing, half capital gains tax discount
Labor wants to curtail negative gearing to lesser extent
A Grattan Institute report on Tuesday showed the top 10 per cent of income earners — before rental deductions — get almost half of all tax benefits of negative gearing.
The same group receives two thirds of all capital gains income.
But Mr Turnbull told 7.30 the income of claimants was not relevant.
"That's beside the point — of course people on the highest incomes will make the highest gains because they tend to have more property," he said.
"There are well over a million Australians who have an investment property, most of whom are on average earnings, who have an investment property and they are negatively gearing it."
The institute wants to scrap negative gearing and halve the capital gains tax discount, saying it would add more than $5 billion annually to Government revenue.
Labor wants to curtail negative gearing to a lesser extent.
Mr Turnbull told 7.30 the Opposition's plan was "unjust and ill-thought out and reckless", saying wealthy Australians could continue to negatively gear against other investment income.
"Workers, people whose income comes from their personal exertion will not be able to negatively gear, but people whose income comes from investments will. Now how is that fair?" he said.
Mr Turnbull also defended the Government's claim that Labor's plan would remove a third of buyers from the residential property market, saying it was "common sense".
But he could not produce modelling to support the argument.
"Around a third of the people who borrow money to invest in property are investors and most of them will be negative gearing," Mr Turnbull said.
...
Grattan Institute chief executive John Daley said the current negative gearing arrangements distorted investment decisions and pushed up house prices.
"It costs the Commonwealth a lot of money," he said.
"Four little changes would increase the amount of tax each year — collected by the Commonwealth — by about $5 billion."
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http://www.abc.net.au/news/2016-05-02/negative-gearing-driving-house-prices-up-liberal-mp-says/7374478
as viewed on 02 May 2016, was
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Budget 2016: Negative gearing helping drive housing prices up, Liberal MP John Alexander says
Four Corners By Ben Knight, staff
Updated May 02, 2016 07:34:12
The Liberal MP who led a parliamentary inquiry into housing affordability has conceded negative gearing has contributed to the current spike in house prices.
Key points:
Housing boom forcing buyers into huge mortgages, or out to the fringes of the cities
Liberal MP John Alexander tells Four Corners negative gearing helped create price spike
Jeff Kennett says Labor's new negative gearing policy is reasonable and responsible
Prime Minister Malcolm Turnbull has made it clear there will not be any changes to negative gearing in tomorrow's budget, but the debate is still going on, as house prices in Sydney and Melbourne remain out of reach for many first homebuyers.
The high prices are the result of a combination of factors — supply and demand, record low interest rates, and the mining boom — but many first homebuyers also blame negative gearing, which gives investors a big advantage in the market.
Liberal MP John Alexander led an inquiry into affordability, and told Four Corners negative gearing has led to a housing market "dominated by speculative investors".
"Too often we see the young couple getting beaten out at the auction, and then renting out the very place that they were trying to buy," he said.
Last year, more than half of new home loans went to investors, rather than to people wanting to buy a place to actually live in.
"We're travelling towards a market that is dominated by speculative investors. First homebuyers have really been unable to compete," Mr Alexander said.
Parliament's inquiry into housing affordability is due to report this year.
While his Liberal colleagues are singing the praises of negative gearing, Mr Alexander said it had helped to create the current price boom.
"Negative gearing has worked very well when it has provided affordable rental properties," Mr Alexander said.
"The moment that it intrudes on the marketplace and stops young families from buying the house, that's not ideal. And that's what's happened in this moment when interest rates have gotten so low."
...
Negative gearing an election issue
Labor turned negative gearing into an election issue when it announced a policy to wind it back.
Mr Alexander says that would create a freefall in the housing market but there are other Liberals who have said negative gearing's time has come.
Former Victorian Premier Jeff Kennett told Four Corners Labor's policy is reasonable and responsible.
"I'm sure if Labor hadn't introduced a policy on negative gearing, the conservatives would have, which is the great disappointment of politics today," he said.
Mr Kennett is not alone, with former treasurer Joe Hockey also having called for negative gearing to be wound back before he left Parliament last year.
Back in 2005, Mr Turnbull himself described negative gearing as "tax avoidance" but "he's now arguing against the proposition he put out before," Mr Kennett says.
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At
http://www.abc.net.au/news/2016-05-11/fact-check-negative-gearing-kelly-odwyer/7401096
as viewed on 12 May 2016, was
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Fact check: Do two-thirds of negative gearers earn under $80,000?
Updated May 11, 2016 09:52:10
The claim
Assistant Treasurer Kelly O'Dwyer says that Labor's policy on negative gearing disadvantages average earners who rely on salaries or wages.
Ms O'Dwyer said on the ABC's Q&A on May 9 that Labor wanted to allow "people who are very, very wealthy" to use negative gearing by deducting property rental income against other investment income.
"The average income earner who relies on a salary or a wage won't be able to do that," she said.
"And two-thirds of people who negatively gear, two-thirds of people, have an income of around about $80,000 or less and that is more than 47,000 teachers who negatively gear, more than 40,000 nurses and midwives negatively gear."
Fellow panellist Cassandra Goldie, chief executive of the Australian Council of Social Service, tried to interrupt Ms O'Dwyer, saying: "That is the taxable income."
After Ms O'Dwyer finished speaking, another panellist, Shadow Assistant Treasurer Andrew Leigh said: "The $80,000 figure is taxable income, in other words that's the income after we've taken account of negative gearing."
Ms O'Dwyer said "yeah", but did not amend her claim, responding to Mr Leigh: "But your policy favours the wealthy."
Are two-thirds of negative gearers average salary or wage earners on incomes of $80,000 or less? ABC Fact Check investigates.
The verdict
Ms O'Dwyer is exaggerating.
Fact Check has previously looked at what negative gearers earn in checking a claim made by Treasurer Scott Morrison in March this year.
The data shows 56 per cent of people who use negative gearing have an income of $80,000 or less.
Taxable income v total income
A similar claim has been made several times by Mr Morrison in the House of Representatives in February and again in the budget speech this month,
However, unlike Ms O'Dwyer, he said that two thirds of negative gearers have taxable incomes less than $80,000.
In relation to Mr Morrison's claim, Fact Check found that analysis of ATO statistics showed that 67 per cent, or two thirds, of the people who use negative gearing have taxable incomes of $80,000 or less.
That is not surprising given that 82 per cent of all taxpayers have taxable incomes below $80,000.
But that this large category represents only 67 per cent of negative gearers, indicates that negative gearing is disproportionately used by taxpayers with higher incomes.
Put another way, only 8 per cent of people with taxable incomes less than $80,000 use negative gearing, compared with 18 per cent among people with taxable incomes above $80,000.
But looked at before negative gearing reduces their total income, 56 per cent of people who negatively gear have a total income of less than $80,000.
'Average' income earners
The context for Ms O'Dwyer's claim on Q&A was that Labor's policy would disadvantage "average income earners who rely on a salary or wage".
In relation to Mr Morrison's claim, Fact Check found that while average male full-time earnings are about $82,000 a year, the most recent ABS data shows that the median annual cash earnings for all earners, male and female, full-time and part-time, was $52,052.
The ATO statistics show that those with a total income of $52,000 a year or less represent 59 per cent of all taxpayers.
Only 4 per cent of these people use negative gearing.
Before negative gearing reduces their income, around 33 per cent of people who use negative gearing have a total income less than $52,000.
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Now, what does all of that, show?
1) "only 8 per cent of people with taxable incomes less than $80,000 use negative gearing, compared with 18 per cent among people with taxable incomes above $80,000."
2) "the most recent ABS data shows that the median annual cash earnings for all earners, male and female, full-time and part-time, was $52,052. The ATO statistics show that those with a total income of $52,000 a year or less represent 59 per cent of all taxpayers. Only 4 per cent of these people use negative gearing."
3) Therefore, the median total annual income, for all wage and salary earners, part time and full timme, is $52,052, and, only 4% of people with a total annual income of $520,000 or less, use negative gearing, and, of the people with a total "taxable" annual income of $80,000 or less, only 8%, use negative gearing, and, of the people with a total "taxable" annual income of more than $80,000, only 18% use negative gearing.
5) So, completely eliminating negative gearing, will only remove the benefit of this tax evasion, from a very small proportion of the population; the people rich enough to use negative gearing, negative gearing, being a tax evasion, from which the great majority of the population are simply not rich enough, to be able to be able to benefit.
Remember; "The ATO statistics show that those with a total income of $52,000 a year or less represent 59 per cent of all taxpayers. Only 4 per cent of these people use negative gearing."
So, why does the government oppose eliminating negative gearing?
Because,if "negative gearing" would be abolished, then, one of the tax evasion schemes used by the members of the parliament, and their rich mates, would be eliminated, and, they and their rich mates, would have to start paying tax, like the less well off, who have to work for a living.
This is simply a case of members of a parliament acting in the parliament, solely in the interests of the financial benefits that they, and their rich mates, receive, with absolute contempt for the public and the economy.
It is the proverbial "Government by the rich and powerful, for the benefit of the rich and powerful".
"Why did you become a member of parliament?" "So that I could make laws that would allow me to evade paying tax, and so that I can get filthy rich, at the expense of the workers who can not afford to pay their living expenses, and, so that I could be entertained, at no cost to me, by causing the most harm possible, to the less well off, at their expense. It is like squashing insects and other animals smaller than me - it is great fun, hurting the vulnerable."
"Negative gearing" needs to be eliminated; losses on any investment, should only be allowed to be offset against income from that exact investment; only against the investment property that incurred the loss, and, only for the financial year of the loss.
And, no capital gains tax concessions, should exist, and capital gains tax should apply to all profits on capital gains, other than on the family home, which should be owned and lived in for at least a year, to qualify for the exemption from capital gains tax.
At
http://www.abc.net.au/news/2016-05-03/budget-2016-morrison-unveils-nip-and-tuck-blueprint/7380562
as viewed on 04 May 2016, was
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Company tax rate flattens to 25 per cent in a decade
The budget includes plans for the small business tax rate to drop 1 per cent to 27.5 per cent this year, and for a small business to be redefined as having turnover of less than $10 million, five times the current turnover to qualify.
By 2023-24 all companies big and small will enjoy the 27.5 per cent rate, and three years later it will drop to a flat 25 per cent.
The Government is also providing a personal income tax break for middle income earners by increasing the upper limit for the middle tax bracket from $80,000 to $87,000.
That will ensure about 500,000 taxpayers avoid moving into a higher tax bracket because of inflation, known as "bracket creep".
In practical terms it will mean the most tax someone in that income range pays is 32.5 per cent. Without the change they could be paying up to 37 per cent.
The Coalition has timed that measure to kick in the day before the election, but may decide against trying to rush the measure through Parliament in the short time that remains this week.
Instead, it could promise to retrospectively implement it after the election.
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At
http://www.abc.net.au/news/2016-05-06/turnbulls-corporate-tax-cuts-under-scrutiny-by-treasury/7389426
as viewed on 06 May 2016, was
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Budget 2016: Turnbull's corporate tax cuts to cost almost $50 billion over 10 years
By political reporter Caitlyn Gribbin
Updated May 06, 2016 12:28:00
Treasury officials have revealed the Government's plan to cut the company tax rate to 25 per cent will cost $48.2 billion over 10 years.
The estimate from the Treasury Secretary comes after the Opposition pounced on the Coalition's refusal to outline the full cost of the proposal.
Treasury Secretary John Fraser told Senate Estimates it is not "standard practice" to release costings beyond four years, but said the 10-year company tax plan would cost tens of billions of dollars.
"The cost of these measures to 2026-27 is $48.2 billion in cash terms," Mr Fraser said.
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Personal income, and company and business profits, should be taxed at the same, single, flat tax rate, and, the tax free threshold for personal income tax, should be the lowest quartile of gross income for all people of at least 18 years of age, who are resident in the country, or, 1.1 times the "poverty level" single income, as suggested above by Ted Roach, whichever is the greater of the "lowest quartile of gross income", and the "1.1 times the "poverty level" single income", and (I believe that this is not suggested by Ted Roach, in the above cited publication), all personal income for partners in married or de-facto relationships, who are living together, should be shared/split, for taxation purposes, both in terms of PAYE/PAYG personal income tax deductions made at the time of income payment, and, for annual personal income tax assessments.
And, if the federal parliament can afford the assessed loss of income of the proposed cuts to the company taxes, the federal parliament could afford to instead, make the changes to personal income tax, as proposed here. And, the difference is that the working class; the people who need to work for a living,, rather than the idle rich and the owners of companies, would benefit, and, the benefits of the proposed changes to personal income tax, would flow on through the economy, and, increase employment, and thence, strengthen the economy, as the benefit would be increasing disposable income of workers, to help the workers to meet living expenses, rather than increasing the channeling of money into the pockets of company owners and directors, and the idle rich.
This web page is authorised and published by Bret Busby, 2 Pelham Street, Armadale.
I can be contacted by email by clicking on the link at Bret
This web page was last updated on 13 May 2016.