Written on the 11th of May 2011 by MLC Technical: A Division on GWM Adviser Services
10 May 2011
Compared with previous years, the 2011 Federal Budget was relatively mild; with few surprises or major changes.
The Gillard Government, handing down its first Budget, confirmed a range of previously announced tax, super and social security policy changes.
And while the Budget has been received as relatively restrained, some new measures were outlined which may impact how you manage your finances today as well as plan for your retirement.
Note: Unlike previous years, this Budget was delivered by a minority Government that may find it more difficult than usual to get some of these measures through both Houses of Parliament.
The key announcements include:
• Unlike in previous years there have been no changes made to the personal tax thresholds or rates.
• Those who exceed their concessional contribution caps for the first time by less than $10,000 will be able to avoid paying excess contributions tax.
• People aged 50 and over with less than $500,000 in super will be able to contribute an extra $25,000 in pre-tax dollars each year.
• The 50% pension minimum drawdown relief will be reduced to 25% in 2011/12 and will return to normal levels from 1 July 2013.
• People under 18 will no longer be able to access the low income tax offset to reduce tax payable on unearned income such as dividends, interest and rent.
• Lower income earners will receive a greater proportion of the low income tax offset through their pay packets.
• Fringe benefits tax on salary packaged cars will be simplified to a single rate of 20%.
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