With Australia currently experiencing a major shift in its political landscape, uncertainty now reigns over the proposed tax policies of the new Government.

The Australian Labor Party announced the following proposed tax changes throughout its election campaign, however under the newly formed minority government, it remains to be seen whether these policies can be passed through parliament in their current form.

• A reduction in the company tax rate to 29% for the 2013-14 income year with small businesses to benefit from early adoption in the 2012-13 income year.
• A new Minerals Resource Rent Tax regime to apply to the mining of iron ore and coal in Australia to commence from 1 July 2012.
• The superannuation guarantee rate to be lifted to 12% in a stepped approach by 2019-20.
• The superannuation guarantee age limit to be raised from 70 to 75 commencing from 1 July 2013.
• Small business capital allowance concessions to increase immediate write-off of assets costing up to $5,000 (up from $1,000 under present law) from 1 July 2012.
• A small business write-off of assets in a single depreciation pool at a 30% rate starting in the 2012-13 income year.
• Individual savings incentive of 50% tax discount on up to $1,000 of interest earned from the 2011-12 income year.
• An additional 50% tax break for green capital works.

In addition to the above, the ALP made a commitment with the Independents in forming a minority government to convene a ‘public forum of experts' by June 2011 to discuss tax reform, including the Henry Tax Review. All 138 of Henry's recommendations would be up for discussion at this ‘Tax Summit' including those previously rejected by the Government. In addition, there has been a strong push to broaden the scope of the review to include GST, which was previously specifically excluded from the Henry Review.

Norman Elliott, Business Services Divisional Leader at WHK Melbourne, said "For small and medium business especially, there are many unanswered questions that await attention. The one thing we know for sure is that the Australian tax landscape will be changing."

In the meantime, there are many other unanswered questions to ponder including, can the Labor Party successfully promote their tax policy vision to the Independents? Or will wholesale amendments be needed to appease the Independents? Can the Coalition exert enough influence to push tax policy change? Interesting times indeed as we await a tax road map for the future.

Andy Briggs

Principal, Tax Consulting

This information contained in this newsletter was compiled by WHK Pty Ltd ABN 84 006 466 351 (WHK) and WHK Financial Planning Pty Ltd ABN 51 060 092 631 (WHKFP). This is an information service only and is not financial advice. WHK and WHKFP do not provide any warranty regarding the accuracy and completeness of information in this newsletter. All material contained in this newsletter is based on opinions, conclusions and forecasts that are reasonably held at the time this newsletter was compiled. WHK and WHKFP assume no obligation to update the material to reflect any changes. WHK, WHKFP, their Directors, employees and agents disclaim all liability for any error, inaccuracy or omission from the information contained in this newsletter or any loss or damage suffered by the recipient or any other person directly or indirectly by relying on the information to the extent permitted by law.

No action should be taken solely on the material contained in this newsletter as the information is of a general nature and does not take into account personal circumstances. Before acting on any material contained in this newsletter you should seek professional advice.

WHKFP is the holder of Australian Financial Services Licence number 238244. WHKFP and WHK are both WHK Group firms.