Budget summary
Minimum pensions
During the global financial crisis the government reduced the minimum pension required to be drawn down for account-based, allocated and market linked pensions. This relief will be reduced by 25 per cent for 2011-12 and phased out in 2012-13.
Low income tax offset for minors
From 1 July 2011 minors receiving non-work income, such as dividends, interest or family trust distributions, will not be entitled to the low income tax offset. This will reduce their tax free threshold to $416.
Accelerated depreciation for small business enterprises
Any motor vehicle purchased from 2012-13 will be eligible for an instant tax write-off for the first $5,000 of its purchase price. The remainder of the purchase value is then depreciated.
Depreciating assets acquired from 2013, valued under $5,000 will be able to be written off immediately.
Log books may help reduce FBT
The 2011 Federal budget also announced changes to the calculation of FBT on motor vehicles. The FBT payable will increase if an employer provided car travels over 25,000 kilometres in the FBT year. The table included here provides a concise breakdown of the current and proposed FBT rates based on kilometres travelled.
Kilometres travelled |
Current FBT rate |
Budget proposed FBT rate |
Less than 15,000 |
26% |
20% |
15,000 – 24,999 |
20% |
20% |
25,000 – 40,000 |
11% |
20% |
Over 40,000 |
7% |
20% |
The Government has said these changes will be phased in gradually however there is a second way to calculate the FBT on a vehicle – the operating cost method.
This method involves the employer being able to identify:
- Repairs and maintenance
- Fuel
- Registration and Insurance
- Depreciation - if owned by the employer
Private use is determined by a log book.
A log book must be maintained for a continuous period of 12 weeks and contain the following information:
- The date the journey began and ended (multiple journeys are treated as a single entry)
- Car odometer readings taken at the start and end of the journey
- The number of kilometres travelled by the car
- The purpose of the travel
If you complete a log book within 12 weeks of the FBT’s year end it can be used for the preceding year. A new log book must be completed every five years.