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2010 Federal Budget Summary

Overall, there is very little in the Budget for the average business in the 2011 year. Apart from the resources super profits tax, the key measure for business is the reduction in the corporate tax rate from 30% to 28%. However, it is worth bearing in mind that this does not phase in until the 2013 financial year for small businesses and 2014 for other businesses.

Personal Tax Rates - NO change to last year’s legislated changes

New tax thresholds from 1 July 2009
(Income range)		 Tax rate
(%)		 New tax thresholds from 1 July 2010
(Income range)		 Tax rate
(%)
$0-$6,000 0 $0-$6,000 0
$6,001-$35,000 15 $6,001-$37,000 15
$35,001-$80,000 30 $37,001-$80,000 30
$80,001-$180,000 38 $80,001-$180,000 37
$180,001+ 45 $180,001+ 45

Click here for link to Dolman Bateman income tax calculator

Increase in the low income tax offset

2010 year - maximum offset $1,350, cuts out where taxable income is $63,750

2011 year - maximum offset $1,500, cuts out where taxable income is $67,500

The low income tax offset will still phase out at a rate of four cents for each dollar over $30,000.

Summary of other measures announced

  • 50% tax savings on up to $1,000 of interest earned by individuals from 1 July 2011
  • medical expenses rebate threshold will increase from $1,500 to $2,000 from 1 July 2010
  • individual taxpayers will get a standard deduction of $500 for work related expenses and cost of managing tax affairs from 1 July 2012 (increasing to $1,000 from 1 July 2013)
  • government set the matching rate for super co-contributions at 100% and freeze the eligibility income thresholds for 2011 and 2012 financial years

Henry Review

It should also be noted that the budget papers contained references to previously released measures as an initial response to the Henry Review. These include:

  • a Resources super profits tax of 40% applying to non-renewable resource projects from 1 July 2012
  • reduction in company tax rate to 29% in 2014 and 28% in 2015 (small business will benefit from 1 July 2012)
  • immediate write off of assets costing less than $5,000 for small business
  • super guarantee age limit increased from 70 to 75 from 1 July 2013
  • workers aged 50 and over with super balances below $500,000 will be able to make up to $50,000 concessional contributions from 1 July 2012
  • government will provide a $500 annual superannuation contribution to individuals with an adjusted taxable income of up to $37,000
  • superannuation guarantee rate will rise to 12% by 2019-20 (phased in from 1 July 2013)