MASTER Builders Australia has backed the First Home Loan Deposit Scheme announced by Prime Minister Scott Morrison. 

Denita Wawn, CEO of Master Builders Australia said, “The scheme will be a boost for both First Home Buyers and residential builders who are worried about the declining housing market.

“For many aspiring First Home Buyers it is the deposit gap rather than the size of mortgage payments that is the real barrier to home ownership and we think the First Home Deposit Scheme will help them overcome it," she said.  

“We have been calling for measures such as this scheme because this kind of targeted and practical approach will do more to assist First Home Buyers than doubling capital gains tax and restricting negative gearing.  

“The measure will be welcomed by home builders and tradies who are facing a softening housing conditions which are down by as much as 30 percent in some markets.

"A stronger building industry means a strong economy and this measure will provide some stimulus for the housing market at just the right time,” Ms Wawn said. 

www.masterbuilders.com.au

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MORE THAN $1.8 billion per year in repair and maintenance work on negatively geared homes will be under threat from Labor’s policy to impose restrictions on negative gearing, according to Master Builders Australia.

Denita Wawn, CEO of Master Builders Australia said, “Thousands of small mum and dad building businesses and tradies in every city, town and region around Australia would feel the impact of Labor’s policy progressively if it is rolled out.

“This work is the bread and butter of so many builders and tradies and Labor’s policy will hurt the viability of their business and will put their livelihoods at risk.

“Repairs and maintenance and maintenance work is a lifeline for many home builders when times are tough as they have been in markets such as Perth and Adelaide for the past few years and we can expect the same in Sydney and Melbourne as those markets continue to fall,” Ms Wawn said. 

“This work is not about renovations or capital improvements, it’s not about adding swimming pools or pergolas, this is the day to day running repairs that keep a home up to standard for residents and renters. 

“Labor’s promise to restrict negative gearing will make investing in these essential repairs significantly less attractive as it is implemented,” Ms Wawn said. 

“The next Federal Government needs to back the thousands of small building businesses who repair and maintain negatively geared investment properties, especially as the housing market softens, not bring in policies that will put their businesses at risk,” Ms Wawn said. 

State/Territory Breakdown 

 Source: recently released ATO figures for year 2016/2017

THE AUSTRALIAN public is being 'hoodwinked' by the Labor claims on the franking credits refunds, according to the Association of Independent Retirees.

“For a year, the Labor Party has continually tried to hoodwink the general public on Franking Credits refunds,” acting president of the Association of Independent Retirees Wayne Strandquist said.

“The Labor Party has taken advantage of the complexity of the tax system and a lack of understanding about franking credits by using over-simplified and emotive terms that do not properly explain the situation,” he said.

“A tax refund occurs when there has been an overpayment of tax and statements like ‘you get a tax refund when you haven’t paid income tax, the tax refund is a gift from the government, it’s a tax loophole, it benefits the top end of town and no other country does this’ do not clarify the policy,” Mr Strandquist said.

“No one criticises workers when they receive a refund when too much tax has been deducted from their income," Mr Strandquist said.

The average self-funded retirees with incomes of between $30,000 and $50,000 will get a significant cut of $5,000 to $10,000 in income under the Labor Franking Credit policy, according to Mr Strandquist.

The association said Labor Party statements on franking credits were open to challenge as follows:

"Firstly, cash refunds are received by low-income earners (including retirees) who do not pay income tax because they own part of a company that has already paid the tax at 30 percent. If a shareholder’s tax rate is less than 30 percent they receive a refund of tax already paid and this is not a gift.
 
"Secondly, it has been argued that the refund of franking credits is rorting a tax loophole. It is not a tax loophole but has been a legitimate part of the Commonwealth tax law since 2000.
 
"Thirdly, it is claimed that franking credit refunds go to the wealthy and benefit only the top end of town. This is not the case for the vast number of self-funded retirees who have incomes below $37,000 a year. Furthermore, the majority of retirees in Self Managed Super Funds are also not wealthy.
 
"Fourthly, there are many OECD countries that have some form of tax imputation scheme.
 
"Finally, retirees can’t retrospectively change their retirement income strategies, so they are soft targets by Labor to raise funds for all sorts of purposes."
 
"The Labor franking credit policy is based on flawed assumptions, is unfair and discriminates against self-funded retirees of modest means,” Mr Strandquist said, “when at the very least the policy should be grandfathered."

www.independentretirees.com.au

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THERE HAS BEEN significant misinformation when it comes to accountants’ fees for providing tax advice, according to the Institute of Public Accountants (IPA).

“The figures used are based on a very small sample.  These in themselves do not justify a policy of capping deductions for tax advice,” IPA chief executive officer, Andrew Conway said.

“In addition, if the numbers being bandied around are using aggregated data, they will result in grossly overstated averages for adviser fees for this sample size.

“The ATO data that has been used related to the 2016-17 financial year.  The label in the income tax return that makes up these figures includes adviser fees, ATO interest charges and litigation costs.

“If aggregated figures are being used, then this is misleading the public," Mr Conway said. 

“Importantly, if aggregated figures are being used, the predicted savings will not be realised. You can polish the crystal ball as much as you like, it doesn’t mean you will see future savings.

“With the release of costings by Labor, we would like to know the facts behind the figures.

“It is also misinformation to say that only the rich can access tax deductions; these are accessible by all Australians.

“It is highly inappropriate to have a universal cap for all taxpayers as circumstances differ; a one-size-fits-all is inequitable.

“Our tax system is complex.  Denying deductibility for seeking advice from a trusted adviser is inappropriate,” Mr Conway said.

www.publicaccountants.org.au

About the Institute of Public Accountants

The IPA, formed in 1923, is one of Australia’s three legally recognised professional accounting bodies.  In late 2014, the IPA acquired the Institute of Financial Accountants in the UK and formed the IPA Group, with more than 36,000 members and students in over 80 countries.  The IPA Group is the largest SME focused accountancy organisation in the world. The IPA is a member of the International Federation of Accountants, the Accounting Professional and Ethical Standards Board and the Confederation of Asian and Pacific Accountants. 

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