Tax policies in the 2016 Federal Election

Tax policies in the 2016 Federal Election

With a looming Federal Election on 2 July 2016, what is the tax and fiscal landscape of Australia? What are the tax policy differences of the major political parties? How has Australia’s budgetary or fiscal position moved since the previous election in 2013?

Leader, Australian Tax Centre

KPMG Australia

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Our report Tax policies in the Federal Election outlines the key tax policies of three major political parties, namely the Liberal Party, Labor and the Australian Greens. With reference to the recent Pre-Election Economic and Fiscal Outlook (PEFO) 2016 issued on 20 May 2016, our report also examines Australia’s cumulative deficits since PEFO 2013.

Policy summaries

Coalition

Income tax

  • Company tax cuts for small and large business
  • Ruled out negative gearing reforms
  • Increase personal tax threshold to address bracket creep

Other taxes

  • Raise tobacco taxes and customs duties
  • Backpacker tax pushed back to 1 January 2017
  • No GST increase, but apply GST to low value goods

Tax Avoidance

  • Suite of tax avoidance initiatives, including bracket creep

Superannuation

  • Redefine the objective of superannuation
  • Limit tax concessions for high income earners

Innovation

  • $1.1 billion National and Innovation Science Agenda

Labor

Income tax

  • Reject company tax rate cuts for large business
  • Not against bracket creep
  • Retain deficit levy permanently
  • Curb negative gearing and CGT discounts

Other taxes

  • Raise tobacco taxes
  • Oppose backpacker tax
  • No GST increase
  • Tax Avoidance
  • Tighten thin capitalisation rules and improve data matching

Superannuation

  • Opposed Coalition’s alleged retrospective changes
  • Reform tax exemption on earnings for retirees in the pension phase (currently tax free)

Innovation

  • Boost science, technology, engineering and mathematics skills

Greens

Income tax

  • Not support income tax cuts
  • Retain deficit levy permanently
  • Phase out negative gearing and CGT discounts

Tax Avoidance

  • 18 point plan: Enforcement, Tax Law, Disclosure, and Diplomacy

Superannuation

  • Reform focusing on low income earners

 

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