You probably noticed we didn't send out a summary of the Budget this year.  I think I received about 30 reports from all levels of commentators, and there was a common approach from all (but one).  All had the same facts but little useful analysis and many missed the point of the Budget, really important for thinking about investment and strategic planning.  I'd also like to see legislation before taking some decisions, although this is unlikely before August/September and depends to a fair degree on who wins the July election.

The message behind the Government and the Reserve Bank approaches;  interest rate cuts, income tax cuts, superannuation, negative gearing, accelerated asset write-offs, innovation subsidy, employment initiatives, are all aimed at encouraging more investment, especially in the property sector.  This is the only market likely to keep the economy growing or at least out of recession, hopefully until the mining sector recovers.

Superannuation

The changes proposed send a mixed message;  almost "if you put too much into super, which will ensure you will never obtain a pension, you'll also get less generous tax treatment now than if you become a tax avoider and negatively gear a property".  The answer no doubt lies in the political thinking rather than the economics, because it doesn't make much sense otherwise.

Super is too important to try and cram everything here into several bullet points.  We'll send out a separate newsletter on this because whoever wins, the changes in super are likely to go through.

For end of 2015/16 financial planning these are the three key issues to consider:

• The maximum concessional (tax deductible) contributions for this tax year are $30,000 for those under 49, and $35,000 if over 49.  From 1 July 2016 the maximum annual contribution for any age will be $25,000.

• It is still possible to make non-concessional (not tax deductible) contributions to super, but there is now a lifetime cap of $500,000 and must take into account all non-concessional contributions since 1 July 2007.

• From 1 July 2017, if the total in super exceeds $1.6m (each member) only the pension on this amount will be tax free to a retiree, and the excess above $1.6m will be taxed in the fund at the super fund rate of 15%.

There are other issues to consider for future years, but for this year a) consider maximising concessional contributions, b) be cautious with non-concessional contributions if you have made others since 2007, and c) it could be time to review your retirement strategy.

BAS

One of the interesting changes was to the BAS.  One survey this year showed SME's spent $14b a year complying with GST.  There are substantial bookkeeping costs most of which seems to be aimed at GST compliance rather than useful information for operations or business financials, plus owner time, plus accounting time to determine codes or classifications.

Only a small item in the Budget but from 1 July 2017 the ATO will reduce the amount of GST information required for the BAS, reporting only GST on Sales, GST on Purchases, and Total Sales.  All other GST items should be removed.

Year End

Can we suggest super is so important you should spend some time with us before 30 June, as part of the end of financial year planning?  In our year end review, we plan to cover profit, tax to pay, deductions, tax benefits, cash flow needs, super and perhaps a couple of my bad jokes too.  We'll be in touch soon to show you where you can benefit.