Federal Budget 2015

[stui magpie]

[think positive]

And that's the scary part. Just like everything I'm guessing the good ones are in the private sector, earning the big money; having spent way too much time with various people with various life threatening illnesses, I now just choose private, wether itS covered or not. If it's not a massive loss, then pay the bastards the incentive.

[stui magpie]

Nah, there's plenty of good ones in the public sector. Check Morrigu's earlier post, it explains it better than I can.

Some of the large hospitals like the Alfred and Austin will have some seriously good surgeons on staff as they do the serious shit. Trauma cases, organ translaplants etc.(that's not to say that the surgeons at other public hospitals aren't any good, they are) Lots of surgeons do private practice and also work part time in the public system. They do that for a number of reasons but generally the money isn't one of them as they get more in private. Removing their ability to salary sacrifice large chunks of the public sector payment will act as an active disincentive for some.

I expect no one to feel sorry for them, I don't, again I'm just flagging the potential consequence.

Personally I use the Private system if I want a surgical procedure that would have a wait list in the public sector. That works for me, I'm not taking up a spot on the wait list and I get what I want done when I want it, i just pay for it. So far I've had a tumour removed from my sons knee and both son and daughter had wisdom teeth removed. I haven't had anything.

[stui magpie]

[thebaldfacts]

The changes to meals/ entertainment announced.

Grossed up cap is $5,000.

Following is a bit technical, but if anyone interested, here it is courtesy of Thomson Reuters.

From Thomson Reuters Weekly tax Bulletin:

677] FBT meal and entertainment concessions for NFP employees to be capped
[677]

FBT meal and entertainment concessions for NFP employees to be capped




The Budget confirmed the Assistant Treasurer's recent announcement that the Government would introduce a grossed-up cap of $5,000 per year on the FBT concessions for salary-sacrificed meal entertainment and entertainment facility leasing expenses (meal entertainment benefits) for employees of certain not-for-profit organisations (ie public and not-for-profit hospitals, public ambulance services, public benevolent institutions (except hospitals) and health promotion charities).

The FBT cap on exempt benefits provided by these NFPs is currently (as from 1 April 2015) $17,667 for public and not-for-profit hospitals and public ambulance services and $31,177 for public benevolent institutions (except hospitals) and health promotion charities. In addition to the capped exemptions, employees of these NFPs can also salary sacrifice meal entertainment benefits with no FBT payable by the employer. These benefits will be subject to a separate grossed-up cap of $5,000 per year per employee.

All meal entertainment benefits will also become reportable benefits and thus will count towards an employee's "reportable fringe benefits amount" for an income year. An employee has a reportable fringe benefits amount" if their individual fringe benefits amount for the relevant FBT year (ie the FBT year ending on the previous 31 March) exceeds $2,000. At present, meal entertainment fringe benefits are "excluded benefits" and therefore are ignored in working out an employee's reportable fringe benefits amount.

Date of effect

These measures will apply from 1 April 2016.

Thomson Reuters note

The move against unlimited meal and entertainment expenses had in fact been mooted before last year's Budget but no announcement was made at that time, so the announcement in this year's Budget was not unexpected.

There had also been some speculation before the Budget that the FBT exemption caps themselves might be reduced or at least a tightening of what they could be used for. The Budget was however silent on this.

The benefits in question have ranged from payments for school fees, mortgage repayments, house rates, electricity and gas bills, credit card purchases, etc under salary packaging arrangements. The exempt benefits caps were originally introduced to assist organisations like public hospitals etc obtain and retain good staff as they did not have the funds to compete with the private sector, but concern has grown over the years that the exemption was not being used in the manner originally intended, nor in the spirit of the law. The ability to utilise the exemption more than once where employees (eg medical specialists) worked for more than one employer was also a concern.

Under the current FBT law, benefits provided to an employee of a registered public benevolent institution (PBI), a public hospital, a private hospital that is a rebatable employer or a public ambulance service (or a service that supports a public ambulance service) are exempt benefits (if provided in respect of the employee's employment). In the case of public ambulance services (or supporting services), the employee must be predominantly involved in connection with the provision of those services. The exemption also extends to benefits provided to an employee who exclusively performs their duties in, or in connection with, a public or private hospital (ie a rebatable employer), but who are technically employed by a government body rather than the hospital. Note, however, there is a limit on the amount of exempt fringe benefits that may be provided: see below. Although exempt, these benefits may form part of the employee's "reportable fringe benefits amount".

The grossed-up taxable value of exempt fringe benefits that a public hospital, private hospital that is a rebatable employer or public ambulance service (or supporting service) may provide to each employee each year is capped at $17,667. Practice Statement PS LA 2001/9 gives the Tax Office's views on which organisations are treated as hospitals for capping purposes. For a PBI and a rebatable employer that is not a hospital, a cap of $31,177 per employee applies. Any amount of fringe benefits above the $17,667 or $31,177 cap are not exempt and are subject to normal FBT treatment.

Reaction

The Community Council for Australia (CCA) said many in the charities and not-for-profit sector recognised that the current system was unfair for most employees in the sector and strayed from the original intent of supporting a stronger charities and not-for-profit sector. Some capping they considered was inevitable.

David Crosbie, CEO of the Community Council for Australia said it was important to understand that more than one million Australians work for charity and not-for-profit organisations in Australia, most at well below commercial rates of pay. He said that over 90% of these employees do not use a meal and entertainment card (originally intended to help the sector attract and retain staff) and of those that do, most claim back relatively small amounts. Mr Crosbie said capping the concession was fair.

Rev Tim Costello, Chair of CCA and CEO of World Vision said that while concessions needed to be retained to attract the best and brightest to the sector, he would prefer the concession was capped at a reasonable level, and that all the savings were used to strengthen the sector, not just be redirected into consolidated revenue. CCA had argued that the concessions should be capped at $15,000 per annum.

[David]

So, they've managed to deliver a budget that offends almost no-one.

http://www.theguardian.com/australia-news/live/2015/may/12/budget-2015-joe-hockey-unveils-his-have-a-go-budget-politics-live

Tactically, it's brilliant. In terms of serving the country's interests, I have no idea any more. Is there still a debt crisis? Is the age of entitlement no longer over? Why is Joe Hockey holding that pendulum? I am getting verrry sleeeeepy.

[thebaldfacts]

[Dave The Man]

[stui magpie]

Oh wow, they made the $5k cap on meals the grossed up amount. Damn that is going to bite hard.

thank christ they made the doe next year, that gives time at least for the providers to do the necessary software and procedural changes.

Better do my US holiday this year.

[thebaldfacts]

[Dave The Man]

What is a Meal Card?

[thebaldfacts]

[Culprit]

The Government is in trouble. Joe came out and told everyone the Country is stuffed, now it's going well and we want you to spend. Abbott came out and said the Victorian Election was a referendum on the East West Link. As the ALP won power Abbott has removed the 1.5 billion dollar funding. The Victorian ALP will be cracking the champagne open this morning. They can now blame the Federal Government for everything.

Stui, we had the bonus under KRudd and now this bonus under Big Ears. Same same but different?

[Skids]

Zone rebate gone. That sucks.

[pietillidie]

Another frighteningly cowardly and irresponsible budget from the Communist Elite Party of Australia. Surely they should change their party motto to something more apt, like "Destroy the productivity incentives of the many while protecting the interests of the few".

I see Howard's communist bribes are now called "small business write-offs", rather than the crowd control measures they really are.

On a bright note, at least the Communist Elite have finally treated the surplus with the contempt it deserves in the present economic context.

And the courage it must have taken to target foreign backpackers and the poor of Indonesia!

I pity your kids, folks. But at least they can now mow the lawns of the Communist Elite with the latest Victa, and watch videos on a new iPad about the education that the children of the Communist Elite are receiving.