The Coalition will look at our current ABN framework and re-design it if need be to better suit current tax laws and values.
No doubt in the gun are contractors who are able to obtain an ABN even though they should be employees. There are a number of measures to combat contractors in this budget and we suspect this is another.
The short summary on why contractors are a problem for the Government is:
a) Most payments to contractors are not reported to the ATO, so a contractor could put one figure on a tax return, but have actually received another
b) Contractors generally have no tax withheld from their payments, so if a contractor doesn’t do a tax return for 5 years, the ATO can easily be out of pocket $150k. If a wage earner did the same, the ATO has already had the $150k paid to it
c) Businesses use contract arrangement to try and avoid super, leave, penalty rates, and other entitlements that employees have
d) The flow on effect is that contractors have lower super balances, and therefore rely on Government services more in later years
Make no mistake, contractors are a target.