Henry Tax Reforms

Whilst mining companies are the major corporate losers from the government's response to the Henry Review there are some positive proposals:-

Businesses will benefit from a proposed reduction in the company tax rate to 28% from the current rate of 30%. Note though, this change falls short of the recommendation by Treasury Secretary Ken Henry to cut company rates to 25%. A reduction the govenment concedes isn't affordable right now.

For small business, simplification of rules for depreciating assets with more generous deductions for assets from the middle on 2012 is another win. Under this regime, small businesses will be able to immediately write-off assets valued at under $5000, up from $1000 currently allowed. All other assets, (excluding buildings), will be able to grouped in a single depreciation pool at a rate of 30% rather than the current need to allocate assets into two different depreciation rules.

The proposed changes to the retirement income system is also, in my opinion, favourable for the individual:

An increase of Super Gurantee (SG) from 9% to 12% commencing with a 0.25 increase in 2013-14 and 2014-15, followed by 0.5 increments until the SG reaches 12% by 2019-20

From 1 July 2012 low income earners on an adjusted income of up to $37,000 will benefit from up to $500 super contribution from the government

From 1 July 2012 workers aged 50 and above with a super balance below $500,000 will be able to make up to $50,000 in annual, concessional superannuation contributions
SG age limit will be increased from 70 to 75 from 1 July 2013

It's a shame (but predicble) that the government has not made an undertaking to significantly simply/overhaul our complex tax system. Was this not what was asked of Ken Henry?