The government had promised it would legislate the tax cuts announced during the 2 April federal budget before the end of this financial year, but Prime Minister Scott Morrison this week said that it would be difficult considering the late timing of the election.
“We obviously have to wait for the writs to be returned, and there is a formal process for that,” Mr Morrison said.
“At the moment, it is not looking like until the back end of June.
“So, that really does make very narrow that opportunity to do it before June 30, and I think that is very unlikely with the advice I have received.”
While there is bipartisan support for giving low and middle-income earners a tax rebate of $1,080, Labor is opposed to the other stages of the tax cuts planned to kick in from 2024, including a flatter 30 per cent tax bracket for income earners between $45,001 and $200,000.
Treasurer Josh Frydenberg yesterday said the government would not split up the tax package but insisted the government was not breaking its election promise despite the possible delays.
“Let me be very clear: the tax relief promised in the budget will be delivered. As you know, in last year’s budget we announced a tax offset of $530. That will be available from 1 July, and that is already legislated,” Mr Frydenberg said.
“In this year’s budget, we extended the tax offset to $1,080 for those earning up to $126,000. The legislation needs to be passed and it will be the first priority of business once the parliament resumes.
“As the Prime Minister has said, it is not likely that the parliament will resume before the end of June because we have to wait for the writs to be returned.
“But let me be very clear: The tax relief outlined in the budget will be delivered to millions of Australians.”
The ATO said that, until new legislation passes, it will only be able to administer the laws as they stand but has offered assurances that it will be able to implement the increased LMITO payments without the need for taxpayers to seek amendments.
“Once legislation is passed, the ATO can implement the increased LMITO payments,” at ATO spokesperson told Accountants Daily.
“If the legislation passes before 1 July 2019, this will be done in the normal way through assessments. If the legislation passes on or after 1 July 2019, the ATO will automatically amend assessments, with no requirement for the taxpayer to lodge another tax return or seek an amendment.”
Jotham Lian is the news editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.
With a focus on breaking news and exclusive analysis, Jotham keeps Accountants Daily readers up to date with company moves, tax updates and essential business and client strategy.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.