What could delay ScoMo’s tax cuts
AUSSIES will still get Scott Morrison's promised tax cuts this year - with the payout now expected to come in two hits.
The promised tax relief will be rushed through by the re-elected Morrison Government when Parliament resumes, acting to both get cash into people's pockets and boost spending in a slowing economy.
MPs are expecting the re-elected Prime Minister to recall Parliament as soon as the result is formally declared, to push the tax cuts through.
It is expected to be a showdown in the Senate if Labor does not support the full package. If Parliament does not sit before the end of the financial year, the passing of the full tax cuts could be delayed.
Offsets worth $530 are already legislated, which means taxpayers will get up to that amount back when they lodge their tax return, depending on how much they earn. The ATO will then be able to issue an "updated assessment" once the full measures have passed.
That will spark a second tranche of payments of up to $550 issued to taxpayers automatically, without a new tax return needing to be lodged.
But just when the second payment will arrive is up in the air, and could be delayed depending how long the legislation takes to get through the Senate.
Labor supports the $1080 tax offset, but the Coalition is expected to demand its full tax reforms to be passed together.
The full measures would include eliminating one tax bracket and dropping the middle tax rate to 30 per cent. If Labor does not support the full measures, the Government will have to split the Bill or convince five of the six Senate crossbenchers to get onboard.
Treasurer Josh Frydenberg said he would seek to pass the package in full.
"It is important it is dealt with as a package. We are talking not just about immediate tax relief, but long-term structural reform," he said.
"But let me be very clear: The tax relief outlined in the budget will be delivered to millions of Australians."
An ATO spokesman said once legislation passed, payments would follow without the need to lodge another tax return or seek an amendment.
He said the process would not involve significant cost.
The full $1080 offset will apply to 4.5 million Australians earning between $48,000 and $90,000 a year. Those earning $22,000 to $30,000 will get $255 back, while people earning more than $90,000 will get lower amounts back tapering to $315 for someone on $126,000.
How you will get your tax cuts
● From July 1, when you fill out your tax return you will get an up to $530 offset from what you have to pay,
or added to your refund.
● The Government will seek to pass a Bill to increase that offset to up to $1080 when
Parliament sits next.
● If this happens after July 1, the Australian Taxation Office will automatically pay out the additional offset of
up to $550.
● You will not have to fill out a new tax return; it will happen automatically once
the new Bill is passed.
● The full $1080 will go to people earning $48,000 to $90,000, with differing amounts paid to those earning outside that range up to $126,000.