MID-YEAR ECONOMIC STATEMENT

In August 2013 the new look Rudd government released a mid-year economic update which reported a fall in projected tax revenues by $33billion over the next four years. In response to the reduced anticipated tax receipts the government has announced some new tax revenue measures:

  • Fringe Benefits Tax – New car contracts entered into from 16 July 2013 will only be able to use the ‘operating cost method’ for calculating the FBT value from 1 April 2014 with both the statutory formula and operating cost method available for the rest of the 2014 FBT year. Any company car arrangements existing prior to 16 July 2013 can continue to choose between the operating cost method or the statutory formula until the car is disposed.
  • Tobacco – An increase in the customs duty on tobacco by 12.5% on 1 December 2013 and further 12.5% increases on 1 September 2014, 2015 and 2016.
  • Financial Stability Fund – A 0.05% levy on all bank held deposits up to $250,000 from January 2016 to create an insurance fund to protect individuals from a financial institution failure. Previously this insurance was provided directly by the government.
  • More tax audits – the government is providing an extra $99million to the ATO to address levels of unpaid tax and superannuation in the economy.