“2019/2020 Federal Budget” - Tax Policy - Critical Analysis Assessment Answer

Assessment Task:

The Australian Government budget sets out the economic and fiscal outlook for Australia and includes expenditure and revenue estimates for the current financial year, the budget year and three forward financial years. It shows the Government's social and political priorities and how the Government intends to achieve these. 
The Government’s economic plan and this Budget are building a stronger economy and securing a better future for all Australians. This Budget and our economic plan are: 
• Returning the budget to surplus
 • Delivering more jobs 
• Providing lower taxes
 • Guaranteeing essential services like Medicare, schools, hospitals and roads. 

As noted, there are four primary budget themes in the 2019/2020 budget. This assignment requires you to look at the “Lower Taxes” initiative. In particular, you are required to examine the following two key initiatives and projects listed.

 Lower taxes for hard-working Australians and small business
 The Government is building a tax system that rewards effort and underpins a strong economy.

  The Australian Government is lowering taxes for working Australians and backing small and medium-sized business while ensuring all taxpayers, including big business and multinationals, pay their fair share. Lower taxes form part of our plan that is delivering a stronger economy and record job creation. The Government’s strong fiscal management means that it can deliver surpluses while also rewarding hard-working Australians and supporting small businesses. Lower taxes will support consumption growth and strengthen our economy. In this Budget the Government is further delivering on its promise to build a simpler and more competitive tax system. Hard-working Australians should pay lower taxes. The Government supports a progressive tax system that eases the cost of living pressures, provides a reward for effort and sustains economic growth. These long-term changes to the tax system will ensure that Australians keep more of the money they have worked hard to earn. The Government will continue to back small business. Small and medium-sized businesses are the engine room of the economy and employ more than 7 million workers. We will continue to lighten their load so they can do what they do best. The Government also believes everyone should pay their fair share of tax, particularly multinationals and big businesses. 
 
Assignment task In relation to the tax policy issue shown above, answer the following questions.
 1. Why is this tax policy issue significant? 
 2. Who are the key stakeholders and how does this policy affect them?
 3. Who are the winners and losers in relation to this tax policy, i.e. what are its pros and cons from the point of view of the stakeholders identified in relation to question 2? 
 4. Assuming that you work for an accounting/tax practice, what would be the implication for your firm and its clients if the tax policy becomes law? 
5. Assuming that you work for the Australian Tax Office, what impact would the tax policy have on compliance work of the ATO