Explanatory Memorandum
(Circulated by the authority of the Treasurer, the Hon Wayne Swan MP)General outline and financial impact
Exemption of income earned in overseas employment
Schedule 1 amends section 23AG of the Income Tax Assessment Act 1936 , to limit its scope to foreign employment income derived by Australian resident individuals only in specific circumstances.
Date of effect : This measure will take effect from 1 July 2009.
Proposal announced : This measure was announced in the Treasurer's Media Release No. 066 of 12 May 2009.
Financial impact : This measure is expected to provide an additional $675 million over the forward estimates period.
Compliance cost impact : Low.
Summary of regulation impact statement
Regulation impact on business
Impact : Low.
Main points :
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- Employers of individuals whose foreign employment income is not exempt will be required to comply with the pay as you go withholding rules.
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- Employers of individuals whose foreign employment income is not exempt will be required to comply with the Fringe Benefits Tax Assessment Act 1986 in relation to any fringe benefits provided to those employees.
Temporary reduction in the Government co-contribution
Schedule 2 to this Bill will temporarily reduce the matching rate and maximum co-contribution that is payable on an individual's eligible personal superannuation contributions.
Date of effect : This measure will take effect for the 2009-10 and later income years.
Proposal announced : This measure was announced in the 2009-10 Budget.
Financial impact : This measure is expected to result in a $1.395 billion fiscal saving over the forward estimates period.
| 2008-09 | 2009-10 | 2010-11 | 2011-12 | 2012-13 |
| Nil | $385m | $395m | $410m | $205m |
Compliance cost impact : Low.
Reduction in the concessional contributions cap
Schedule 3 to this Bill will reduce the concessional contributions cap to $25,000 per annum (indexed) from the 2009-10 financial year. The reduced cap will apply to all concessional superannuation contributions made in the 2009-10 and later financial years.
Schedule 3 to this Bill will also reduce the transitional concessional contributions cap (applicable to individuals aged 50 and over) to $50,000 per annum (not indexed) for the 2009-10, 2010-11 and 2011-12 financial years.
Date of effect : This measure will take effect from 1 July 2009.
Proposal announced : This measure was announced in the 2009-10 Budget.
Financial impact : This measure is expected to result in a $2.81 billion revenue saving over the forward estimates period.
| 2008-09 | 2009-10 | 2010-11 | 2011-12 | 2012-13 |
| Nil | $625m | $640m | $720m | $825m |
Compliance cost impact : Low.