Government takes a view on 64 outstanding tax and super measures

The government has provided some certainty to the taxation system in the lead-up to the year end by deciding on the fate of 64 unlegislated tax and superannuation measures.

In its previous announcement on November 6, the government said 18 out of a total of 92 unenacted tax and superannuation measures would proceed, three would be amended and seven would not go ahead ­ including the treatment of car fringe benefits, the $2000 cap on self-education expenses, and the luxury car tax.

At that time, the government promised a speedy review of the remaining 64 measures but noted that it was likely not to proceed with them. In the event however, the Assistant Treasure has announced that:
– 16 of the measures will proceed, with no net financial impact over the forward estimates, and
– 48 measures will not proceed, at a net revenue cost of $67.9 million over the forward estimates.

Taxpayers Australia welcomes this speedy review, which provides much needed certainty around these particular measures, many of which were originally announced several years ago (one of them dates back to 2001) and have been in limbo ever since.

Mark Chapman, Head of Tax for Taxpayers Australia commented: “Many of the measures announced by the Assistant Treasurer are relatively minor and technical in nature. The problem lies in the fact that so many measures could be announced by previous governments and then remain unenacted for so long.”

“This is a damning indictment on the effectiveness of our legislative system. Unfortunately, whilst the backlog has now been cleared, the system which caused it remains and there is a real risk that new announcements from the new government will simply build up over time in the same way.”

The measures which are proceeding include the capital gains tax (CGT) look-through treatment of earn-out arrangements, the income tax treatment of instalment warrants, and the GST reverse charge for going concerns.

Conversely, those that are not proceeding include quarterly credits for the research and development (R&D) tax incentive, CGT relief for taxpayers affected by natural disasters, and symmetric treatment of bad debts. A number of superannuation measures ­ including the acquisition and disposal of certain assets between self-managed superannuation funds,Stronger Super reforms and the take-up of deferred lifetime annuities ­have also been resolved.

It is expected that the bulk of legislation will be passed by Parliament sometime in 2014.