Tax changes following mining tax repeal

The Coalition government late last year introduced a Bill into Parliament to repeal the mining tax. A number of other tax measures and concessions associated with the mining tax are also proposed to be repealed or revised.

Under the changes, the small business instant asset write-off threshold will be reduced from $6,500 to $1,000. This means that, with effect from 1 January 2014, small business entities (ie generally, those with an aggregated turnover of less than $2 million) will be able to claim a deduction for a value of an eligible depreciating asset that costs less than $1,000 (rather than $6,500) in the income year in which the asset is first used or installed ready for use. If implemented, this proposed change will return the threshold to the level it was prior to changes made by the previous Labor government. The special rules allowing accelerated depreciation for motor vehicles will also be discontinued with effect from 1 January 2014.

The Coalition government also proposes to delay the phased-in increased in the superannuation guarantee charge percentage to 12% by two years. This means that the superannuation guarantee rate would:

• pause at 9.25% for the years starting on 1 July 2014 and 1 July 2015;
• increase to 9.5% for the year starting on 1 July 2016; and
• gradually increase by half a percentage point each year until it reaches 12% for years starting on or after 1 July 2021.