The government’s impending Mid-Year Economic and Fiscal Outlook will likely contain more business-centric initiatives as it holds off on its “treasurers-chest” of measures for individuals for the upcoming budget.
Treasurer Josh Frydenberg is set to deliver his first MYFEO update on Monday, 17 December, ahead of an early federal budget, which has been brought forward a month early to 2 April 2019.
BDO partner Mark Molesworth believes the government will hold off from any major tax concessions for individuals and instead look to focus on business initiatives, including extending or making permanent the instant asset write-off.
“Conditions are looking good, with economic growth of 3.4 per cent, an unemployment rate of 5 per cent and an uptick in business conditions providing more revenue to Treasury to bring the budget into surplus,” said Mr Molesworth.
“As this is a check-in mid-way through this current financial year, we don’t expect MYEFO to contain many tax concessions or pre-Christmas cheer for individuals.
“Families and individuals will need to wait until the April budget before they see a ‘Treasurers-chest’ of measures ahead of what’s likely to be a hotly contested Federal election.”
Mr Molesworth also believes the government may look to capitalise on the perceived unrest about the Labor party’s policy on refunds of franking credits during the MYFEO announcement.
CPA Australia head of policy Paul Drum had earlier tipped the pre-election federal budget to be “concessional” towards individuals and businesses.
“I’m expecting that in a pre-election budget, they might be concessional to taxpayers – it could be a grab bag of goodies for businesses and taxpayers,” said Mr Drum.
Likewise, Mr Molesworth believes individuals will have to wait for the federal budget to see “pre-election presents”.
“This includes the proposed tax cuts for individual which would see all income between $40,000 and $120,000 taxed at the single rate of 32.5¢ in the dollar, while also increasing the offset for low-income earners to $645 a year and the 19 per cent tax bracket from $37,000 to $40,000,” he said.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.