Attached is a summary of the Henry Tax Report and the Government's response.  This is the most significant tax review since the introduction of GST on 1 July 2000 and we can expect further changes resulting from this to be announced in stages in the future.  The Government has limited changes from the first stage and perhaps this is political with an election coming up soon and also the general economic uncertainty that significant change can bring.

Most of the current changes will be implemented from 1 July 2012.  This first wave of changes focuses on resource, company and small business taxes and superannuation.  A fairly complex Resource Extraction Tax will be levied and linked to this will be a State Infrastructure Fund to invest in major infrastructure particularly in the Resource Rich States.  Business will need to build in to their cost structure the increase on SGC Super for employees which is to rise to 12% by 2020.  Most new superannuation policies will benefit Australians as Super is seen as the main form of savings for Australia and provided a significant buffer during the Global Financial Crisis.

There are no immediate changes that will affect you in the year-end 30 June 2010 from this report, although the Federal Budget to be released this month may have matters impacting on current position.

We are currently reviewing business and investor clients for 30 June 2010 and suggest anyone who is concerned about organising their affairs for best tax advantage should contact us now to undertake planning for this year and longer term planning.  Superannuation continues to be the best tax planning vehicle and we recommend you take the opportunity each year to transfer assets into this low tax environment.  For those over 55 there are opportunities to put your fund into pension mode and for the fund to then pay zero tax on fund earnings.