Powered by MOMENTUM MEDIA

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

Tax policies pose hurdles to Labor’s pre-election traction

Scott Morrison and Bill Shorten

Labor’s tax policies are proving a dampener on their hopes with winning over the accounting community, according to new polling.

A straw poll of 1,207 accountants – conducted by sister title Accountants Daily – has revealed that 82.1 per cent of respondents believe the Australian Liberal Party will deliver better tax policies for Australia.

In contrast, the latest Ipsos poll shows Labor leading the Liberal-National Coalition 51-49. In December, Labor held a lead of 54-46.

The opposition’s plan to end cash refunds for excess dividend imputation credits has drawn flak, with clients set to change their investment mix. You can read more about this proposal here.

Advertisement
Advertisement

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. CA ANZ believes a carve-out for small businesses should exist and has called for greater transparency on details of the proposal.

Proposed restrictions on negative gearing, now confirmed to apply across the board to all investments when it was previously thought to be limited to property investment, have also been highly debated. You can read more about this proposal and how it impacts you here.

Tax experts believe the move will add complexity to the system due to a number of carve-outs and will add a new category of tax loss – the investment loss.

Labor’s popular plans

As an alternative to the government’s dumped corporate tax rate cut, Bill Shorten has pledged 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.

The measure will be made available to all businesses regardless of size and will be made a permanent feature of the tax system.

The move has been considered a more “business-friendly” initiative compared to the government’s current instant asset write-off, which is only available to small businesses, runs on a one year extension, and only recently bumped up to a $25,000 cap.

Labor has also moved to accelerate the already legislated tax cuts for business under $50 million that will see those companies facing a tax rate of 26 per cent by 2020–21 before finally dropping down to 25 per cent in 2021–22.

Labor also plans to deal with housing affordability by halving the CGT discount down to 25 per cent, a move supported by the Australian Housing and Urban Research Institute and various tax experts.

Tax policies pose hurdles to Labor’s pre-election traction
Scott Morrison and Bill Shorten
nestegg logo
subscribe to our newsletter sign up
FROM THE WEB
Recommended by Spike Native Network
The Patriot - It seems madness to lower interest rates when we know that we will need room to drop later as the economy slows on back of China slowing. If wages do.......
Anonymous - Does the RBA think?....
Anonymous - Bloody mad. Much cheaper and better and more fun to learn to cook for yourself. And, if you are time pressed, a crockpot set up the night before and.......
Anonymous - The RBA seems to think more expensive land is prosperity. Not for the landless!....