may 2009 automotive accountants' forum

Automotive Accountants’ Network

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“Is It or Isn’t it?”

19 May 2009

Presenter: Angelo Sirianni, Colledge’s

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This presentation has been prepared by Colledge’s for the general information of its clients and seminar attendees. While the information herein has been prepared with all reasonable care and derived from sources believed to be accurate, no responsibility or liability is accepted by Colledge’s or any of its affiliations, for any errors or omissions including liability to any person of negligence or otherwise.

Recommendations may not be appropriate in all circumstances and clients must consider their own personal objectives and financial advice before acting on recommendations in this presentation.

Colledge’s (ABN 52 439 950 641)

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Quotes of the day

Sure there have been injuries and deaths in boxing, but none of them serious.- Alan Minter, Boxer

A billion here, a billion there, sooner or later it adds up to real money.- Everett Dirksen, Congressman

I have opinions of my own --strong opinions-- but I don't always agree with them. - George Bush, former U.S. President

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Federal Budget 2009

References:

•ANZ Economics & Markets Research, electronic newsletter “Federal Budget Report”, 13 May 2009

•Thomson Reuters’ Weekly Tax Bulletin, Issue 19, 12 May 2009 “Special Issue – 2009 Federal Budget Report”

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Economic summary

•Deficit 2009-10 $57.6 bn 4.9% of GDP

•Deficit 2010-11 $57.1 bn 4.7% of GDP

Federal Budget 2009

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Economic summary (cont)

•Deterioration due to ‘hit’ on revenue

•Result from economic backdrop being weaker

•Discretionary policy spending

Federal Budget 2009

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•Government forecasting a ‘mild’ recession

•Australian economy to reduce by 0.5%

•Recovery in 2010-11 to 2.25% growth

•Projected GDP above 4.5% in 2011-12 and 2012-13

Federal Budget 2009

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•“Underlying cash balance is not expected to return to surplus until 2015-16” (ANZ Federal Budget Report)

•Based on projected GDP growth in 2011 to 2013

•Recovery in revenue will occur “naturally”

Federal Budget 2009

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•Most spending focused on investment, infrastructure, education and health

•ANZ estimates that the Budget “will add 0.75% to GDP in 2009/10 and 0.25-0.5% in 2010-11”

Federal Budget 2009

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•Net debt is expected to peak at 13.8% of GDP in 2012-13

•Low by international standards

•Debt expected to decrease to 3.7% of GDP by 2019-20

•The Budget will not have a repercussion on our “AAA” credit rating, according to rating house Standard & Poors

Federal Budget 2009

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Federal Budget 2009

Residents: Personal tax rates and thresholds

Current From 1 July 2009 From 1 July 2010Taxable income Rate Taxable income Rate Taxable income Rate

($) (%) ($) (%) ($) (%)0 - 6,000 0 0 - 6,000 0 0 - 6,000 0

6,001 - 34,000 15 6,001 - 35,000 15 6,001 - 37,000 15

34,001 - 80,000 30 35,001 - 80,000 30 37,001 - 80,000 30

80,001 - 180,000 40 80,001 - 180,000 38 80,001 - 180,000 37

180,001+ 45 180,001+ 45 180,001+ 45 Low income tax offset

1,200 1,350 1,500

Tax Budget measures•Superannuation concessional caps cut to $25,000 from 2009/10

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Private Health Insurance rebates and surcharges(effective 1 July 2010)

Federal Budget 2009

Singles Couples Rebate

Surcharge

Tier 1 > $75,001 > $150,001 20% 1%

Tier 2 > $90,001 > $180,001 10% 1.25%

Tier 3 > $120,001 > $240,001 - 1.5%

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Parental Leave

•Births and adoptions on or after 1 January 2011

•Parents able to lodge claim from 1 October 2010

•18 weeks (after birth) Leave at Federal minimum wage

Currently $543.78 per week

Federal Budget 2009

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Parental Leave – eligibility

•Worked at least 10 out of 13 months (continuously) before the birth

•Worked at least 330 hours/~1 day per week within the 10 months

•Adjustable taxable income of ≤ $150,000

Federal Budget 2009

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Parental Leave – eligibility (cont)

•Employers will act as “pay master”

•Government will fund employers for employee payments

•Parents will still be eligible for Parental and Annual Leave paid by employers

•Available to contractors, casual workers and self-employed

•Payments will be taxable

•Superannuation is not (currently) included

Federal Budget 2009

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Small Business

•Small business tax break up to 50% from 30%

• Use of non-commercial losses restricted – applicable 2009-10 financial year

•ATO strategic compliance package

•Indexation of ASIC fees from 2010-11 income year

•Do Not Call Register – expanded to businesses

Federal Budget 2009

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Small Business (cont)

•Division 7A to apply to use of assets

Applicable from 2009-10 financial year

“Div 7A deemed dividend rules extended to licence or right to use real property and chattels such as cars, boats and real estate” (Thomson Reuters Weekly Tax Bulletin)

Decrease extent of shareholders or associates being allowed to use assets for free

Federal Budget 2009

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First home buyers

•Grant extended for an extra 6 months

•Contracts: 1 July 2009 to 30 September 2009FHOB* $7,000 established + FHOG** of $7,000 =

$14,000

$14,000 new + FHOG of $7,000 = $21,000

•Contracts: 1 October 2009 to 31 December 2009FHOB $3,500 established + FHOG of $7,000 = $10,500

$7,000 new + FHOG of $7,000 = $14,000

*FHOB = First Home Owners’ Boost **FHOG = First Home Owners’ Grant

Federal Budget 2009

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ACCC New Pricing Legislation

References:

•Article: “Laws crack down on advertisers’ use of fine print”, Creedy.Steve, The Australian, 7 May 2009

• Article: “Alarm bells on ad rules”, Lord.Philip, Go Auto News, 6 May 2009

• www.accc.gov.au (accessed 7 May 2009)

• “Pricing Manual for the Motor Vehicle”, ACCC 2009.

http://www.accc.gov.au/

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Overview

•Changes to “Clarity in Pricing” of the Trade Practices’ Act (TPA) commence 25 May 2009

•Rules of component pricing contained in S53C of the TPA

•Dealers must understand their legal obligations and “comply with all the requirements of the TPA” (ACCC Pricing Manual for the Motor Vehicle Industry, 2009)

•“Law now requires you to provide a single price that consumers need to pay to obtain a motor vehicle. This price must be stated in a prominent way.” (ACCC Pricing Manual for the Motor Vehicle Industry, 2009)

ACCC’s new pricing legislation

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• Advertising must “prominently” show the total price of car, i.e. the total price for a consumer to drive away with that car.

• Component pricing can still be used, but the total price has to be stated and be just as prominent and clear as the component price.

• “A prominent single price is one that: Stands out so that it is easily seen by a

consumer Is clear, eye-catching and very noticeable” (ACCC Pricing Manual for the Motor Vehicle Industry, 2009)


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“To ensure that you are providing a price in a prominent way, you should check whether your advertising ... looking closely at the medium you are using. While this will vary largely on a case-by-case basis, you should consider factors such as the size, placement, colour and font of the price, as well as the background of the advertisement.”

(ACCC Pricing Manual for the Motor Vehicle Industry, 2009)


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Unclear advertising under new legislation



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Clear advertising under new legislation

