What's New @ Dewings?

The South Australian State Budget was handed down on 6th June 2013.

The most significant new tax measure for small-medium business was some welcome respite from Payroll Tax for the next two years, by way of a rebate payment for employers with payrolls under $1.2 million.

The rebate will be paid in respect of the 2012-13 and 2013-14 years, in the six months following. The effect is that employers with a taxable payroll of up to $1 million will have paid payroll tax at a rate of 2.5% rather that the statutory rate of 4.95% - almost half the amount of payroll tax over a period of 2 years. The rebate will phase out gradually for payrolls between $1 million and $1.2 million.

You can read more about the measures in Revenue SA Information Circular No. 56.

Some have said that historically the Federal Budget handed down on May 14th 2013 will be remembered for DisabilityCare and the education reforms. That may well end up being the case, but it has made for slim pickings from a tax and business point of view. There was very little in the budget that was not previously known or mooted - right down to the size of the deficit ($18 billion) - and even less that is likely to have any significant impact on small-medium enterprises (SMEs) in Australia. Most of the announced business reforms are targeted at large corporate enterprises and multi-nationals, for the most part leaving SMEs untouched. In some respects this is welcome, but in another sense we can't but help wonder aloud - if the current revenue shortfall is attributable in part to a decline in business profits, could more have been done to stimulate business development and growth?

Read our full summary of the budget highlights here.

Morgan Stanley here in Adelaide have released their May Investment Viewpoint. 

"Recent trends in Australian equities continue to show that mid to large caps, high yield, and defensive stocks, are driving the market higher. By contrast, the Resources sector has been left behind in the rally - the Small Resources Index is now back to levels seen in the Global Financial Crisis."

Read more: Morgan Stanley Investment Viewpoint May 2013

The Federal Treasurer Wayne Swan today issued a media release regarding changes to the tax treatment of superannuation for those earning income within their funds of over $100,000.

Currently earnings in a superannuation fund are tax free once a fund starts supporting income streams (i.e. when it starts paying a pension or annuity - in most cases where a member retires or reaches retirement age). The Treasurer has flagged the Government's intention to start taxing any earnings over $100,000 per annum for each such member at the concessional superannuation fund rate of 15% from 1st July 2014. It is estimated, based on an assumed rate of return of 5%, that this would only apply to those with $2 million or more in superannuation, so it has limited application. However it is indicative of the Government's intention to continue tinkering with superannuation in order to source future revenue.

Transitional arrangements will apply to reduce the potential impact on for those who find themselves affected by these changes as at the application date. It may be, however, that action should be taken by those affected prior to the application date in order to minimise the impact of the higher rate of tax.

You can read further details of the release here, and of course if you have any questions please contact us.

Morgan Stanley here in Adelaide have released their March Investment Viewpoint. 

"Last month saw markets break through key psychological barriers – with the ASX200 cracking the elusive 5,000 level for the first time since April 2010, and the US Dow Jones passing 14,000 for the first time since October 2007."

Read more: Morgan Stanley Investment Viewpoint March 2013