Treasury

The Treasury provides policy advice on a range of issues from macroeconomic policy settings to microeconomic reform, social policy, as well as tax policy and international agreements and forums.

The Treasury has offices in Canberra, Sydney, Melbourne and Perth. The department has been increasing its regional engagement to help deepen its understanding of the challenges and opportunities facing regional economies.

There are a number of entities in the Portfolio that are nationally dispersed, including the Australian Taxation Office and the Australian Bureau of Statistics. Office locations for these entities include Dandenong, Geelong, Newcastle, Gosford and Townsville.

As at 31 December 2018, the Treasury Portfolio employed 26,375 staff under the Public Service Act. Of this total, 10,557 staff (40.0 per cent) were employed in Canberra, central Melbourne and central Sydney, 5,625 staff (21.3 per cent) in other capital cities, and 10,193 staff (38.6 per cent) in other locations (including international posts).

Further details are provided in the Treasury Portfolio Budget Statement.

New Initiatives

North Queensland Flood Recovery Package—tax treatment of qualifying grants

The Government will provide an income tax exemption for qualifying grants made to primary producers, small businesses and non-profit organisations affected by the north Queensland floods. Qualifying grants include Category C and Category D grants provided under the Disaster Recovery Funding Arrangements 2018, and grants provided under the On-Farm Restocking and Replanting Grants Program and the On-Farm Infrastructure Grants Program.

The exemption will apply where the grants relate to the monsoonal trough, which produced flooding that started on or after 25 January 2019 and continued into February 2019.  The grants will be made non‑assessable non-exempt income for tax purposes.

Luxury car tax—increased refunds for eligible primary producers and tourism operators

The Government will provide further relief to farmers and tourism operators by amending the luxury car tax refund arrangements. For vehicles acquired on or after 1 July 2019, eligible primary producers and tourism operators will be able to apply for a refund of any luxury car tax paid, up to a maximum of $10,000.

Currently, primary producers and tourism operators may be eligible for a partial refund on the luxury car tax paid on eligible four-wheel or all-wheel drive cars, up to a maximum refund of $3,000.

The eligibility criteria and types of vehicles eligible for the current partial refund will remain unchanged under the new refund arrangements

Current Initiatives

Small Business Package—lower taxes for small and medium businesses

The Government has fast tracked tax relief for over three million small and medium‑sized businesses, including those in regional areas. Both small and medium‑sized companies and unincorporated businesses will benefit. The Government is delivering this tax relief five years earlier than planned.

The tax rate for eligible companies with aggregated annual turnover below $50 million will fall from 27.5 per cent currently to 26 per cent in 2020-21 and to 25 per cent in 2021-22.

Unincorporated businesses with aggregated annual turnover below $5 million will benefit from an increase in the unincorporated small business tax discount rate. The discount rate will increase from 8 per cent now to 13 per cent in 2020-21 and to 16 per cent in 2021-22 (up to the existing cap of $1,000).

Assistance for Farmers and Farm Communities in Drought—accelerated depreciation of fodder storage assets

Primary producers can now immediately deduct (rather than depreciate over three years) the cost of fodder storage assets, such as silos and hay sheds, used to store grain and other animal feed. This encourages the storage of fodder in good growing seasons when it is less expensive, for use in periods of drought when on-ground feed is more limited. This measure applies on an ongoing basis from 19 August 2018.

This measure formed part of the Assistance for Farmers and Farm Communities in Drought measure in the Mid-Year Economic and Fiscal Outlook 2018-19.

Zone Tax Offset and related remote area tax concessions and payments

The Zone Tax Offset, Fringe Benefit Tax remote area concessions and Remote Area Allowance provide financial support to people living in remote areas of Australia. The locations eligible for these forms of assistance are determined by geographic ‘zones’, defined in tax legislation.

Concerns have been raised that the remote area tax assistance has not fundamentally changed over a number of decades to reflect changes in demography, infrastructure and cost of living.

In November 2018, the Treasurer requested that the Productivity Commission undertake a review into remote area tax assistance to ensure it remains fair and contemporary. The study commenced in February 2019 and the Commission is due to report to the Government within 12 months.

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