4 May 2010

The Henry Review – or more correctly the Rudd response to the Henry Review

Things not to worry about

While the headlines deal with the details of the Henry Review recommendations that the Govt is accepting (much of which will not happen before 1 July 2012, assuming this Govt is still in power), what is maybe even more relevant is what has been categorically been rejected, many of which have been things that have been beaten up in the press for some time – and are the things therefore that you can tell clients not to worry about (in the foreseeable future) – as per the following excerpt:

The Prime Minister and the Treasurer have stated that, in the interests of business and community certainty, the Government will NOT implement the following recommendations contained in the Henry Tax Review at any stage:
  • including the family home in means tests;
  • introducing land tax on the family home;
  • requiring parents to work when their youngest child turns 4;
  • hitting single income families;
  • restricting eligibility to rent assistance for families;
  • making any changes to the tax system that harm the not-for-profit sector, including removing the benefit of tax concessions; raising the gift deductibility threshold or changing income tax arrangements for clubs;
  • reducing overall remuneration to members of the Defence Forces;
  • reducing the CGT discount, applying a discount to negative gearing deductions or changing grandfathering arrangements for GST;
  • removing the Medicare levy;
  • reducing indexation of the age pension;
  • removing the benefits of dividend imputation;
  • hitting pensioner and low income concessions for utilities, transport and other essential services;
  • introducing a bequests tax;
  • aligning the preservation age with the pension age;
  • offering a Government annuity product;
  • asking the States to charge market rents to public housing recipients;
  • indexing the fuel tax to the consumer price index (CPI) ; and
  • changing alcohol tax in the middle of a wine glut and if there is an industry restructure underway.
The Prime Minister and the Treasurer also reaffirm that the Government will never increase the rate or broaden the base of the GST or remove tax-free superannuation payments for those over 60 years of age.

We can now look forward to next week's Budget, to see if that will prove to be of more significance.

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This Newsletter, of necessity, has dealt with matters of a technical nature in general terms only. Clients should contact us for detailed information on any of the items in the Newsletter. No responsibility for loss occasioned to any person acting or refraining from acting in reliance upon any material in this Newsletter can be accepted by any member or employee of the firm.

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