The CGT small business concessions : recent evidence from the perspective of the tax practitioner

On 21 September 1999 Division 152 was inserted into the Income Tax Assessment Act (1997) (ITAA 1997). It was subsequently subject to amendments in 2006. Division 152 contains the small business CGT concessions, which enables eligible small business taxpayers to reduce the amount of tax payable on capital gains arising from certain CGT events (including the sale of the small business itself) that occur after 11:45 am on 21 September 1999. One of the stated principal objectives of the legislation was to provide a concessionary regime for small business owners who did not have the same ability to access the concessionary superannuation regime (particularly the superannuation guarantee charge) generally available to employees. The then Federal Treasurer, Mr Peter Costello, when announcing the introduction of the concessions, specifically stated that the object of Div 152 was to provide “small business people with access to funds for retirement or expansion”. The purpose of this project is to: one, assess the extent to which small business taxpayers understand the CGT small business concessions, particularly when considering sale of their business; two, determine which of the four small business CGT concessions are being adopted and/or recommended by tax advisors to clients; and three, determine whether the recent superannuation changes announced by the Federal Government in relation to the capping of the concessional superannuation thresholds have had an impact on the use of the small business retirement concession. It is anticipated that the results of this study will reveal that that small business owners are reliant on their tax advisors to explain the operation of Division 152. It is plausible that give the complexity of the CGT concessions, most small business owners are completely unaware of the four small business CGT concessions contained in Division 152 and do not understand how these concessions apply. Our study will also reveal the extent to which each CGT small business concession has been adopted (and reasons why). In particular, emphasis will be placed on the adoption of the small business retirement concession contained in Subdivision 152-D (and specific reasons for its adoption). This study also seeks to understand whether the recent (and impending) changes to the concessional superannuation cap has resulted in the retirement concession being more widely adopted (or recommended) by tax advisors. We would expect that the results of our study to confirm this to be the case, particularly coupled with the recent economic downturn, which has led to lower superannuation fund balances. By providing accounting firms with this information, small business owners will benefit from the information, becoming better placed to be long-term self funded retirees, providing not only financial benefits to the individuals and the country, but a significant increase in social self-assurance by these members of the community.

The benefits of thermal clothing during winter in patients with heart failure : a pilot randomised controlled trial

Background Many Australian cities experience large winter increases in deaths and hospitalisations. Flu outbreaks are only part of the problem and inadequate protection from cold weather is a key independent risk factor. Better home insulation has been shown to improve health during winter, but no study has examined whether better personal insulation improves health. Data and Methods We ran a randomised controlled trial of thermal clothing versus usual care. Subjects with heart failure (a group vulnerable to cold) were recruited from a public hospital in Brisbane in winter and followed-up at the end of winter. Those randomised to the intervention received two thermal hats and tops and a digital thermometer. The primary outcome was the number of days in hospital, with secondary outcomes of General Practitioner (GP) visits and self-rated health. Results The mean number of days in hospital per 100 winter days was 2.5 in the intervention group and 1.8 in the usual care group, with a mean difference of 0.7 (95% CI: –1.5, 5.4). The intervention group had 0.2 fewer GP visits on average (95% CI: –0.8, 0.3), and a higher self-rated health, mean improvement –0.3 (95% CI: –0.9, 0.3). The thermal tops were generally well used, but even in cold temperatures the hats were only worn by 30% of subjects. Conclusions Thermal clothes are a cheap and simple intervention, but further work needs to be done on increasing compliance and confirming the health and economic benefits of providing thermals to at-risk groups.

Measuring exposure to solar ultraviolet radiation using a dosimetric technique : understanding participant compliance issues

Personal ultraviolet dosimeters have been used in epidemiological studies to understand the risks and benefits of individuals' exposure to solar ultraviolet radiation (UVR). We investigated the types and determinants of non-compliance associated with a protocol for use of polysulphone UVR dosimeters. In the AusD Study, 1,002 Australian adults (aged 18-75 years) were asked to wear a new dosimeter on their wrist each day for 10 consecutive days to quantify their daily exposure to solar UVR. Of the 10,020 dosimeters distributed, 296 (3%) were not returned or used (Type I non-compliance) and other usage errors were reported for 763 (8%) returned dosimeters (Type II non-compliance). Type I errors were more common in participants with predominantly outdoor occupations. Type II errors were reported more frequently on the first day of measurement; weekend days or rainy days; and among females; younger people; more educated participants or those with outdoor occupations. Half (50%) the participants reported a non-compliance error on at least one day during the 10-day period. However, 92% of participants had at least 7 days of usable data without any apparent non-compliance issues. The factors identified should be considered when designing future UVR dosimetry studies.

Cost-effectiveness of a national initiative to improve hand hygiene compliance using the outcome of healthcare associated staphylococcus aureus bacteraemia

Background The objective is to estimate the incremental cost-effectiveness of the Australian National Hand Hygiene Inititiave implemented between 2009 and 2012 using healthcare associated Staphylococcus aureus bacteraemia as the outcome. Baseline comparators are the eight existing state and territory hand hygiene programmes. The setting is the Australian public healthcare system and 1,294,656 admissions from the 50 largest Australian hospitals are included. Methods The design is a cost-effectiveness modelling study using a before and after quasi-experimental design. The primary outcome is cost per life year saved from reduced cases of healthcare associated Staphylococcus aureus bacteraemia, with cost estimated by the annual on-going maintenance costs less the costs saved from fewer infections. Data were harvested from existing sources or were collected prospectively and the time horizon for the model was 12 months, 2011–2012. Findings No useable pre-implementation Staphylococcus aureus bacteraemia data were made available from the 11 study hospitals in Victoria or the single hospital in Northern Territory leaving 38 hospitals among six states and territories available for cost-effectiveness analyses. Total annual costs increased by $2,851,475 for a return of 96 years of life giving an incremental cost-effectiveness ratio (ICER) of $29,700 per life year gained. Probabilistic sensitivity analysis revealed a 100% chance the initiative was cost effective in the Australian Capital Territory and Queensland, with ICERs of $1,030 and $8,988 respectively. There was an 81% chance it was cost effective in New South Wales with an ICER of $33,353, a 26% chance for South Australia with an ICER of $64,729 and a 1% chance for Tasmania and Western Australia. The 12 hospitals in Victoria and the Northern Territory incur annual on-going maintenance costs of $1.51M; no information was available to describe cost savings or health benefits. Conclusions The Australian National Hand Hygiene Initiative was cost-effective against an Australian threshold of $42,000 per life year gained. The return on investment varied among the states and territories of Australia.

Assessing taxpayer response to legislative changes: A case study of ‘in-house’ fringe benefits rules

On 22 October 2012, the Australian Federal Government announced the removal of the $1,000 in-house fringe benefits concession when used as part of a salary packaging arrangement. At the time of the announcement, the Federal Government predicted that the removal of the concession would contribute additional tax revenue of $445 million over the following four years as well as an increase of GST payments to the States and Territories. However, anecdotal evidence at the same time indicated that the Australian employer response was to immediately stop providing employees with such in-house fringe benefits via salary sacrificing arrangements. Data presented in this article, collected from a combination of interviews with tax managers of four Australian entities as well as a review of the published archival data, confirms that the abolition of the $1,000 in-house fringe benefits concession was perceived as a negative change, whereby employees were considered the ‘big losers’ despite assertions by the Federal Government to the contrary. Using a conceptual map of tax rule change developed by Oats and Sadler, this article seeks to understand the reasons for this fringe benefits tax change and taxpayer response. In particular, the economic and political factors, and the responses of the relevant taxpayers (employers) are explored. Drawing on behavioural economic concepts, the actions, attitudes and response of employers to the rule change are also examined. The research findings suggest that the decision by Australian employers to cease providing the in-house fringe benefits as part of a salary-packaging arrangement after the legislative amendment was impacted by more than simple rational behaviour.