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FPA - KEY POLICIES FOR THE  2019 FEDERAL ELECTION  14 May 2019

Written and accurate as at: May 16, 2019 Current Stats & Facts

KEY POLICIES FOR THE  2019 FEDERAL ELECTION  - 14 May 2019
14 May 2019

Financial services


The Coalition has agreed to 75 of the Royal Commission’s 76 recommendations. It will not proceed with recommendation 1.3 which recommended that mortgage brokers not receive trailing commission revenue but will instead review trailing commissions in three years’ time.
Labor has also agreed to 75 of the Royal Commission’s 76 recommendations. It will move to prohibit trail commissions for mortgage brokers and put in place a fixed rate commission.
 
The Coalition has committed to phasing out grandfathered commissions on non-risk products from 1 January 2021.
Labor has committed to phasing out grandfathered commissions on non-risk products from 1 January 2020.


Tax
The Coalition has promised to extend the Low and Middle Income Tax Offset (LMITO) by increasing the base amount from $200 to $255 and the maximum amount from $530 to $1,080. LMITO is due to run until 2022, but questions remain over whether the government can deliver the changes for the 2018-19 financial year.
Labor has pledged to match the Coalition’s increase in the maximum rate to $1,080 and will increase the base amount to $350 instead of $255, which will provide a greater benefit to taxpayers earning less than $48,000.
 
From 1 July 2024, the Coalition will reduce the 32.5 per cent tax rate to 30 per cent, abolish the 37 per cent tax rate and increase the threshold for the 30 per cent tax rate to $200,000.
Labor will not support the Coalition’s proposed tax cuts and has stated that further tax cuts for high income earners should only be considered when the budget returns to a “sustainable surplus”.
 
The Coalition will increase the instant asset tax write-off from $25,000 to $30,000 and making this available for medium sized businesses (those with an aggregated annual turnover of between $10 million and $50 million) as well as small businesses.
From 1 July 2019, Labor will remove the ability of individuals and self-managed super funds to receive cash refunds for imputation credit. Australian government pensioners and allowance recipients will be exempt.

Labor will introduce a standard minimum 30 per cent tax rate for discretionary trust distributions to mature beneficiaries to address tax minimisation through income splitting.
 
Labor will limit negative gearing to new housing purchased after 1 January 2020. All investments made before this date will not be affected by this change and will be fully grandfathered.
 
Labor will halve the capital gains discount for all assets purchased after 1 January 2020. This will reduce the capital gains tax discount for assets that are held longer than 12 months from the current 50 per cent to 25 per cent. All investments made before this date will not be affected by this change and will be fully grandfathered.
 
Labor will cap the amount of tax deductions available for the cost of managing tax affairs to $3,000.


Superannuation
The Coalition plans to build on its significant reforms to superannuation over the past few years by allowing voluntary superannuation contributions (both concessional and non-concessional) to be made by those aged 65 and 66 without meeting the work test from 1 July 2020. People aged 65 and 66 will also be able to make up to three years of non-concessional contributions under the bring forward rule. Those up to and including age 74 will be able to
Labor has targeted high income earners with its superannuation policy and will reduce the annual non-concessional contributions cap to $75,000 and the High Income Superannuation Contribution threshold to $200,000. Labor has also said it will reverse the Coalition’s introduction of catch-up concessional contributions and changes to tax deductibility for personal superannuation contributions.

 Small business
The Coalition has extended the small business instant asset write-off for assets under $30,000 until 30 June 2020. It has also committed to establishing an Australian Business Growth Fund to provide equity investment to small businesses looking to expand. It will join the Australian Business Securitisation Fund, which aims to help small business get access to bank and non-bank lending.
Labor has agreed to support the Coalition’s instant asset write-off and will make it permanent. Labor has also said it will create an Australian Investment Guarantee to provide an immediate 20 per cent deduction for small business assets over $20,000.

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