Most recently, we saw the announcement to effectively remove the 'statutory method' for calculating the FBT on motor vehicles. Prior to that, the government introduced measures to address the 'overuse' of the living away from home allowance (LAFHA) exemptions and concessions, and removed the ability to receive FBT concessions for salary packaging of in-house fringe benefits.
Superannuation reforms have also been high on the agenda with the removal of the age based limit above which superannuation contributions were not previously required, the introduction of additional reporting requirements on pay slips, as well as changes to the concessional contributions caps and the ability to withdraw excess concessional contributions and pay tax on these at the individual’s marginal rate, in lieu of 46.5 percent.
The immediacy with which these changes have come into effect has meant that professional bodies and industries impacted by these changes are promptly responding and reacting to these changes, lobbying government and putting forward their views via media releases and submissions to Treasury.
Employers also have to respond quickly to these announcements and take appropriate action to:
- identify affected employees
- communicate changes with employees and address their concerns
- either restructure arrangements / amend employment contracts or put a freeze on existing arrangements
- revise internal checklists / policies and procedures to reflect the changes and mitigate any potential risks
- update payroll and accounting systems as required.
It is imperative that finance and human resource professionals work together within the organisation and with their advisers to determine the most appropriate action for their business and the change management approach. If these two groups do not work together, there is a much greater potential for detrimental impact to employee morale.