Mid-Year Economic and Fiscal Outlook
Changes to salary packaging arrangements
The recent Mid-Year Economic and Fiscal Outlook or Mini-Budget brought a raft of changes to Government policy aimed at trimming costs and increasing revenue to meet their promise of bringing the Budget back into surplus in 2013.
In his speech, the Treasurer announced the abolition of In-House Benefits available under salary sacrificing or salary packaging arrangements.
In-House Benefits are essentially a discount by way of a tax exemption on the purchase of goods or services by employees of a company.
The In-House Benefit is not a widely used employee benefit as it doesn’t apply to the vast majority of workers. Workers hardest hit by these changes will be school teachers who have been meeting the cost of their children’s school fees under this method. So too, the travel industry and those Public Servants including their electricity bills and public transport (Go Card) costs under this arrangement.
Like the recent changes to Living Away from Home Allowances, it is difficult to see where the projected revenues are going to come from as a result of the removal of this benefit. As mentioned above, the benefit is not widely used or readily applicable to the vast majority of employees regardless of industry.
Interestingly, those hardest hit will be the voters the Government will be relying on to get re-elected in 2013.
For the vast majority of businesses, there will be little or no impact on your current or future salary packaging arrangements as a result of these changes.
If you believe you and your employees will be impacted and have some questions , please do not hesitate to contact us by clicking here or calling (07) 3054 1000.