Once again I am going to hand over the blog to our Senior Tax Adviser Simon Ellis, this time to give you a rundown of the 2010/11 Federal Budget:
The Australian Federal Budget was handed down at 7:30pm Tuesday May 11. This was the third budget for the Rudd Labor Government, and its first in an election year. To some extent the budget builds on the policy priorities already released as part of the Government’s formal response to the Henry Review.
From a salary packaging point of view the budget does not offer any significant changes or challenges. Unlike previous Rudd Government budgets, salary packaging rules were left untouched this year meaning that all salary packaging items will remain available.
In this regard it’s worth noting that there were a number of benefits being closely watched in the run-up to this budget (and the Henry Review) as various sources had indicated that there was some potential for change. The lack of movement around these items in this year’s budget allows us to draw a number of conclusions:
All employees
• Cars: no change to the vehicle concession and therefore salary packaging can continue as in previous years
• Superannuation: can still be salary packaged up to unchanged concessional contribution caps
Employees of public hospitals and not-for-profits
• Tax free threshold: no reduction or abolition of the tax free threshold benefit.
• Meal Entertainment: no roll back of FBT concession therefore meal entertainment still a packageable item
• Holiday Accommodation and Venue Hire: no roll back of FBT concession for entertainment facility leasing expenses therefore holiday accommodation and venue hire still packageable (where allowed by employer)
I’ve summarised the changes in the following short video presentation:
Overall the budget has not been detrimental to Australian salary packaging arrangements, nor has it required any significant change to packaging systems or procedures.
This means that SmartSalary will continue to focus on the delivery of simple, safe and valuable benefits without disruption for the foreseeable future.
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