Better than expected surplus
Honouring the tradition of always surprising on the upside, the Treasurer and Finance Minister have proudly announced a better than expected budget surplus of $15.8 billion for 2023-24.
While that might seem like a big number, it only represents 0.6 per cent of GDP, and the result came mainly from underspending on various programs, much of which will find its way into the 2024-25 numbers. Still, coming after achieving a $22.1 billion surplus for 2022-23, that is $38 billion that our grandkids won’t have to repay out of their future taxes. Deficits have been forecast over the remainder of the economic outlook, however, as commodity prices finally look as though they are starting to ease.
One concern about the 2023-24 result is the record tax take, particularly from personal taxes. The Stage 3 tax cuts that came in three months ago will be of some help in that regard, but rising real wages will soon mean that the politician’s friend, bracket creep, will start to claw it all back.
TASA Code of Conduct consultation
Because of the pending second disallowance motion scheduled for debate in the Senate next week, Treasury has embarked on what must be one of the shortest consultation timeframes in recent history with comments on the exposure draft amendments that are contained in the Tax Agent Services (Code of Professional Conduct) Amendment (Measures No. 2) Determination 2024 and Explanatory Statement due tomorrow, 2 October.
The short turn around time is not as bad as it looks, as the joint professional bodies (including the Institute of Financial Professionals) have been exchanging drafts with Treasury on almost a daily basis. Our joint submission should be ready by late Wednesday.
While the government has taken on board many of our suggestions, the legal requirement for practitioners to inform on clients who refuse to rectify a false or misleading statement remains a feature of the exposure draft (albeit with a much higher threshold than the way it was originally drafted).
We have stressed this is anathema for most of our membership as it undermines the trust that has to exist between tax practitioners and their clients, but the government seems unlikely to budge on this issue.
