Here are some of the important changes that have been announced in this year's federal budget:
As reported in the lead up to the Budget, the Medicare levy will increase to 2% from 1 July 2014 to fund the Government’s DisabilityCare Australia reforms. Revenue raised from this measure will be paid into a dedicated fund administered solely for the purpose of meeting DisabilityCare funding needs.
In addition to the Medicare Levy, higher income earners without sufficient private health cover will continue to be assessed to a further 1% surcharge.
The increase in the Medicare Levy brings the effective top marginal tax rate to 47%. A number of tax laws apply the top effective rate as a penalty rate of tax. As a consequence, the following items will also be subject to tax of 47% (currently 46.5%):
The increase in the tax-free threshold to $19,400 which was to take effect from 1 July 2015 has been deferred.
Climate Change Minister Greg Combet says the tax-free threshold increase will be deferred "until such time as the carbon price exceeds $25.40 (a tonne), whenever this may be."
As such, personal income tax rates are unchanged.