On 9 May 2019, the Western Australia Treasurer, Ben Wyatt, delivered the 2019-20 Western Australia State Budget. Whilst this Budget will be the first budget surplus in 5 years, only a small number of changes to payroll tax, fees, tariffs and charges have been proposed. Notably, this Budget does not include any changes to the stamp duties and land tax regime which is not surprising given the significant changes recently introduced by the Revenue Laws Amendment Bill 2018.

This Budget focuses on delivering funding to infrastructure projects, creating jobs, spending on health and education and providing relief to low income individuals and families as well as turning around the deficit of the previous government – areas which the Western Australia Government pledged to deliver on.

The key revenue measures and highlights announced in this Budget include:

• $553 million budget surplus which appears to be driven by higher than expected iron ore royalties and a GST prepayment resulting from the new 70% GST floor.
• Saving of $109 million from the removal of the payroll tax exemption for new worker trainees earning up to $100,000 per annum from 1 July 2019.
• Withdrawal of the proposed implementation of the Metropolitan Region Improvement Tax in the Peel and Greater Bunbury regions. This removes $22 million of expected revenue.
• Minimal increase to electricity and water tariffs, public transport fares and public services fees.
• Spending on various infrastructure projects including $4.1 billion on the rail network and a total of $4.2 billion on other road projects.
• Investing $22 million in capital funding for community mental health facilities, $42.5 million for the Methamphetamine Action Plan and funding projects to create another 1,500 aged care beds.
• Spending $22.1 billion over four years on primary and secondary schools.

The Budget forecasts a decline in revenue from land tax and stamp duty in 2019-20 due to a decrease in taxable land values and property transactions. However, this is expected to be offset by $80 million stamp duty revenue from the Foreign Buyers Surcharge.

The Revenue Laws Amendment Bill 2018 containing a plethora of state tax amendments in November 2018 has now been passed and is awaiting Royal Assent. Some of the key changes include:

• Stamp duty on various fixed infrastructure and related access/control rights as well as derivative mining rights.
• Expansion of the definition of “land” for stamp duty to include anything fixed to land regardless of whether they are common law fixtures if they are being acquired independently from the underlying land.
• Introduction of a 3 year claw-back period for any stamp duty exemption sought for a corporate reconstruction and an automatic revocation where the transferee leaves the corporate group whilst holding the exempted assets during that period.
• Amendments to allow a progressive transition of a farm to family members without stamp duty impost.
• Various land tax amendments, including residential exemption for land that is subdivided or amalgamated during an assessment year.
• A minor payroll tax amendment to replace the rate for calculating the exempt motor vehicle allowance to the rate prescribed in the payroll tax regulation and not income tax regulation.

 

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