Accounting minutes, June 2011

9. Impacts on members related to the global financial crisis

(Standing business item)

Gross domestic product (GDP) uplift factor for pay as you go instalment (PAYGI) and goods and service tax (GST) instalment amount for 2011-12.

The government has introduced legislation to reduce the gross domestic product (GDP) adjustment factor for pay as you go (PAYG) instalment taxpayers who use the GDP adjustment method. This method bases instalment amount on the previous year's taxable income, uplifted by a GDP adjustment factor to reflect likely income growth.

The GDP adjustment factor will be reduced from 8% (which is the rate that would apply under existing law) to 4% for the 2011-12 income year. For eligible GST payers the GDP adjustment factor that will apply in 2011-12 income year will also be 4%.

This measure provides significant cash flow benefit to small business, individual investors and small superannuation funds. The measure also 'smooths' the transition from 2% GDP adjustment that has applied for the last two years as the economy recovered from global financial crisis.

As always, if the amount the Commissioner calculates does not reflect a taxpayer's current situation, they can vary their instalment to reflect their anticipated end-of-year position. They will not be penalised if the variation is made in good faith.

Sections within Agenda items

• 1. Opening, introductions and apologies
• 2. Confirmation of minutes of 8 April 2011
• 3. Review of action items from previous meetings
• 4. Proof of identity requirement for agents
• 5. Higher Education Loan Program (HELP) and Student Financial Supplement Scheme (SFSS) 2011 statement run
• 6. Tax file number enhancements - Improvements to individual tax file number registration
• 7. Tax Time 2011 - lead up to 'go live'
• 8. Pre-filling of tax returns
• 9. Impacts on members related to the global financial crisis
• 10. Other business