It is extremely disappointing that the Federal Government has turned its back on simplifying the preparation of tax returns for millions of Australians. In the pursuit of short-term revenue considerations, it has abandoned the Budget proposal of only two years ago to allow a standard tax deduction for work-related expenses. The only conclusion we can draw from this is that the Government is not concerned about making it easier for people with simple tax affairs to complete their tax returns. This important tax simplification measure was a step towards fairer and simpler tax returns, but it will be no more.
The government forecasts a bumper 11% increase in taxation revenue which the government has indicated will come from an increase in company tax receipts of up to 9% and an increase in personal tax collections of 8%.
The budget is a big taxing, big spending budget with significant increases in welfare payments.
The government expects the 2011/12 deficit of $44B (which last year was forecast to be a deficit of $22.6B) will turn into a $1.5B surplus at the end of 2012/13.
Even though the government is predicting a surplus of $1.5B, it intends to increase its debt ceiling to $300B from the current ceiling of $250B. This is partly caused by the non-inclusion of the National Broadband Network expenditure in the government's forecast budget surplus figure.
The government is relying on the introduction of the carbon tax from the 1st July 2012 to generate revenue during 2012/13. This is based on a carbon price of $23 per tonne. The carbon price is predicted to increase to $29 per tonne in 2015/16 irrespective of what the market rate for carbon pricing is in other countries, primarily Europe.