To: ALL AADA MEMBERS
Passenger Vehicle Taxes
- Despite the cessation of local vehicle manufacturing, both the Luxury Car Tax and the Passenger Vehicle Tariff have been retained.
- Collectively both taxes will raise $1.27 Billion in 2018-19.
- The LCT will generate $740 million in 2018-19, $40 million more than forecast in the Mid-year Economic and Fiscal Outlook (MYEFO).
- The LCT is forecast to grow over the forward estimates to $830 by 2021-22.
- The tariff on motor vehicles will raise $530 million in 2018-19, $50 million more than forecast in MYEFO.
- The tariff is forecast to decline over the forward estimates to $400 million by 2021-22.
- The Australian economy has entered its 27th consecutive year of growth.
- Real GDP is forecast to grow by 2.75 per cent in 2017-18 and is forecast to accelerate further to 3 per cent growth in 2018-19 and 2019-20.
- The underlying cash balance is forecast to be a deficit of $14.5 billion in 2018-19.
- The underlying cash balance is expected to return to a budget balance in 2019-20. An underlying cash surplus is projected in 2020-21, growing to more than 1 per cent of GDP in the medium term.
- These projections are consistent with the Government’s fiscal strategy which requires that tax receipts do not exceed 23.9 per cent of GDP throughout the medium term.
- The Government is providing income tax relief which involves:
- immediate relief of up to $530 per annum for low and middle-income earners;
- helping to protect Australians’ earnings from bracket creep by increasing thresholds;
- ensuring more Australians pay less tax by making personal taxes simpler and flatter. From 1 July 2024, the personal income tax system will be simplified by abolishing the 37 per cent tax bracket entirely, reducing the number of tax brackets from five to four.
- The budget lowers taxes for small and medium-sized businesses as part of the Enterprise Tax Plan and the Government will continue to seek full implementation of the tax plan (businesses with turnover more than $50 million).
- The budget will extend the $20,000 instant asset write-off for businesses with a turnover of up to $10 million to apply in 2018-19.
- The budget will invest $75 billion in transport infrastructure over the coming decade.
- The budget will be implementing a number of recommendations of the Black Economy Taskforce Final Report.