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small business – Fiscal Artisans
Streaming Content Rules 2026: What They Mean for Your Screen Business
A Fiscal Artisans briefing for Australian Film, TV and Screen Creatives
Stuart Smith
Director – Fiscal Artisans
1. Why this matters
From 1 January 2026, the major streaming platforms operating in Australia will be legally required to spend a minimum amount each year on new Australian content. For producers, writers, directors and service businesses in the screen sector, this turns what was previously a discretionary budget line
into an ongoing, regulated demand for Australian stories.
At Fiscal Artisans we look at this through a financial and strategic lens: how large is the spend, who controls it, and how can you position your projects and business to capture a share of it.
2. The new rules in plain English
The Communications Legislation Amendment (Australian Content Requirement for Subscription
Video On Demand (Streaming) Services) Bill requires any “major” streaming service to invest each year in new Australian programs.
In practice, a service is in scope if it:
- Has at least 1 million paying subscribers in Australia; and
- Offers content in the eligible genres – drama, children’s programs, documentaries, arts or educational programs.
Each in-scope service must spend, per year, on new eligible Australian programs:
- At least 10% of its total Australian program expenditure; or
- At least 7.5% of its Australian-sourced revenue.
Only spending on the eligible genres counts. Spending on sport, news, current affairs and advertising does not count.
Most reality and light entertainment formats are also outside the net unless ACMA specifically treats them as arts or educational programming.
For clarity, the requirement applies to money spent on new Australian productions or official co-productions – not to simply re-labelling existing library content.
3. Who is captured – and where Foxtel sits
Based on current market data and the Government’s own analysis, the services expected to qualify as “major SVODs” include:
- Netflix
- Amazon Prime Video
- Disney+
- Stan
- Paramount+
- Apple TV+
- Binge (Foxtel Group)
Other services such as HBO Max may join this list as they grow their Australian subscriber base.
Foxtel is a special case because it operates both traditional subscription TV and streaming brands:
- Foxtel’s linear pay-TV drama channels are already subject to a separate
New Eligible Drama Expenditure (NEDE) obligation. Those rules require at least 10% of drama-channel program expenditure to be invested in new Australian drama. - Binge, Foxtel’s general entertainment streaming platform, is treated as a separate SVOD service and is expected to fall directly under the new 7.5–10% streaming obligation.
- Foxtel Go, which simply mirrors the main Foxtel channel line-up, is identified in the Parliamentary material as the type of service ACMA can exempt, because the underlying broadcast service already has content rules.
- Kayo Sports has more than 1 million subscribers, but its spend is almost entirely on sport – and sport is explicitly excluded from the new quota. Any obligations for a service like Kayo would need to be met via non-sport content, or ACMA may treat it as a special case.
The practical outcome is that Foxtel Group will continue to invest in Australian drama and factual content via both the existing NEDE regime and Binge’s new streaming obligation, while sports-heavy offerings remain outside the eligible spending bucket.
4. How big is the spending “floor”?
ACMA’s latest data indicates that the major streamers already spend several hundred million dollars per year on Australian and Australian-related content. Within that, the Government’s modelling for the new law expects the obligation to translate into approximately $175–$200 million per year in spending on new, eligible Australian programs – specifically adult drama, children’s content and documentaries, plus smaller amounts in arts and educational programming.
Importantly, this $175–$200 million is not a cap; it is a conservative estimate of the combined minimum spend across the major SVODs. Current actual spending on Australian drama, children’s content and documentaries by streamers is already in that range. The law’s role is to:
- Lock in a floor under that investment; and
- Tie it proportionally to future growth in Australian streaming revenue.
If we take a mid-point of around $190 million per year and distribute it roughly by subscription share across Netflix, Prime Video, Disney+, Stan, Paramount+ and Binge, an indicative set of annual “eligible content envelopes” might look like:
- Netflix: approximately $55–60m
- Amazon Prime: approximately $45–50m
- Disney+: approximately $30m
- Stan: approximately $20–25m
- Paramount+: approximately $15–20m
- Binge (Foxtel): approximately $10–15m
These are modelling numbers only – not official quotas – but they give a realistic sense of scale for how much each platform is likely to allocate annually to eligible Australian projects.
5. Where the money actually lands – genre mix
Not all genres are equal under the new rules. Sport, news, current affairs and most reality formats are outside the net. Within the eligible bucket, ACMA and Screen Australia data show that adult drama dominates current Australian spending, with smaller but meaningful investment in children’s content and factual/documentary programs.
As a working rule of thumb for the eligible spend:
- 60–70% is likely to flow into drama (series, telemovies, features, high-end narrative comedy)
- 10–15% into children’s content (drama and factual)
- 15–20% into documentary and factual programming
- 5–10% into arts and educational content
For creative businesses, this means that scripted drama remains the primary vehicle for absorbing the new spending floor, but there are stable, repeatable opportunities in children’s and documentary work as well, particularly when they align with each platform’s brand and audience strategy.
6. What this means for your screen business
From a Fiscal Artisan’s perspective, there are several practical implications for producers, creatives and service providers:
1. A more predictable pipeline of premium commissions
The obligation runs on a rolling multi-year basis, with carry-forward and carry-back provisions. Platforms can smooth their spending over three-year windows, but they cannot walk away from Australian content entirely.
This gives you a more stable base of demand to plan against – for talent, overheads, studio space and post-production capacity.
2. Higher value placed on clearly eligible projects
Projects that unambiguously qualify as new Australian drama, children’s programming or documentaries are strategically valuable to streamers, because they help them hit their regulated spend.
Conversely, projects that sit in grey areas (reality formats, light entertainment, hybrid factual) may be harder to justify unless they are exceptional brand fits.
3. Continued importance of co-productions and offsets
The new rules sit on top of existing tax offsets and Screen Australia/state funding. A well-structured finance plan will blend quota-driven streamer money with Producer Offset, Location Offset and agency support.
For many larger projects, the Australian quota spend becomes one pillar in a broader, multi-market finance stack.
4. Foxtel Group as an ongoing commissioning centre
Between Foxtel’s NEDE-driven drama obligations and Binge’s streaming requirement, the group has strong incentives to carry a viable slate of Australian drama and factual titles across linear and on-demand platforms.
This underpins opportunities not just for high-profile flagship series, but also for returning series, docu-series and related factual content.
In short, the legislation does not guarantee any single project, but it does create a regulated pool of spend that must land somewhere in the Australian screen ecosystem each year. Your job is to position your business and your slate so that “somewhere” is you.
7. Action checklist: going beyond the numbers
To turn this policy change into a practical opportunity, we recommend the following steps:
- Audit your slate:
- Identify which projects clearly tick the eligibility boxes (Australian, new, drama/children’s/doc/arts/educational).
- Prioritise those projects for streamer-facing pitches.
- Map projects to platforms:
- Link each project to one or two best-fit platforms based on genre, tone and audience.
- Consider where Binge and Foxtel’s existing drama commitments may create particular openings.
- Design finance structures around the new floor:
- Treat the mandated streamer spend as one input into your financing, alongside offsets, presales and agency funding.
- Build flexible models that accommodate different commissioning levels and windowing strategies.
- Strengthen your data and reporting:
- Be ready to demonstrate Australian creative control, spend in Australia and other eligibility metrics cleanly in your documentation.
- This reduces friction in approvals and contract negotiation.
- Seek advice early:
- If you are planning a slate or a larger long-term strategy, it is worth modelling different revenue and spend scenarios under the new regime.
- Fiscal Artisans can help you build Treasury-style models, stress-test them, and translate policy into actionable project plans.
The new streaming content rules are a structural shift, not a passing headline. Used well, they can underpin a more resilient, better-capitalised Australian screen sector. Our role is to help you connect the policy settings to your budgets, your cashflows and your long-term creative strategy – so you can genuinely go beyond the numbers.
Presented by Mr Stuart Smith, Director Fiscal Artisans
A review of the 2025 Australian Federal Budget
Key changes:
New tax cuts for individual taxpayers in 2027 and 2028
Increased Medicare levy low-income thresholds
Making student loans fairer
Energy bill relief
Expansion to Help to Buy scheme for first home buyers
Restricting Foreign Ownership of Housing
Support for the Hospitality Sector and Alcohol Producers
Banning non-compete clauses for low and middle income workers
Healthcare
Skills and Education
Instant asset write-off changes
Click on the video below:
As a creative artist, your focus is on making the best use of your talents and skills, and turning this into a viable, income-earning activity.
And sometimes, this means that your income and cash flow are ‘lumpy’, with periods of low or no income, followed by ‘the great years’. Years of effort, that result in a large cash payment in one year – and a large tax bill as a result.
For this reason, it’s important that you can understand the concept of Income Averaging. This tax treatment offers significant concessions, and knowing how to make the most of them can save you a lot of money.
It is ok if you are not familiar with this particular area of taxation, we’re here to help. This is a highly specialised field that only a select few have expertise in. Many accountants, unless they have a specific focus on creative industries, may not be aware of it. Moreover, if you typically handle your tax returns on your own, it is improbable that this benefit has come to your attention. This is why you need to utilise an accountant that understands and specialises in the creative industries (as Fiscal Artisans does!) to assist you in your accounting and taxation matters.
Here’s how it works: your Special Professional income from creative sources (such as writing, performing, or inventing) is isolated and taxed at a concessional or reduced rate based on a rolling 5-year average. This means you pay less tax in years where your income from these sources is significantly above average. In years where your income is below or in line with your average, you are taxed at normal marginal tax rates. Keep in mind that income from other sources is always taxed at normal rates, and income averaging may not benefit you in years where your income is below average. However, years of lower income will affect your rolling average, and reduce your tax rate in future periods when you earn above-average income.
To qualify for income averaging, you must be classified as a “Special Professional.” This encompasses authors, artists, composers, inventors, performers, production associates, and sportspersons. In some cases depending on the circumstances, you may be designated as such if you are in a “creative decision-making role” such as a director. Eligibility is assessed on a case-by-case basis, so it’s wise to seek advice from a knowledgeable tax professional to determine if you meet the criteria.
One of the reasons these jobs are included in income averaging is due to the inconsistent nature of income. For example, a composer may spend years developing a project before receiving any income, resulting in large peaks and troughs of income year to year. Income averaging helps to spread this income over the entire development process, resulting in lower overall tax payments.
In simple terms, Income Averaging allows you to smooth out your taxable income over a few years, minimising the impact of any one high-earning period. By doing so, you can reduce your overall tax liability and free up funds to invest back into your creative pursuits.
In the first 4 years, the benefit can be even greater! It is quite common for the first year of averaging to result in little or no tax needing to be paid – at least on the earnings up to $90,000 (assuming no other income has been earned on salary from areas like school teaching, waiting tables or other non-artistic employment)
Keep in mind that income averaging is an opt-in system, and once you opt-in, you remain in the system. You can start using income averaging once you’ve earned more than $2,500 from creative work, and it only considers the income generated from creative activities to calculate your average. Other income, such as non-creative activities or investments, is not included.
Ok, you say, so what sort of benefit can this provide?
Case Study 1
Brian Eno(1) is a successful composer, musician and recording artist. They have a stream of income coming from local and international royalties from Film and TV compositions, Gigs and CD sales annually, as well as investment and non-Artist income.
In 2021, they lodged their Income tax return without claiming Artist Averaging, as they had done in all prior years of their career.
On a total taxable income (after all deduction claims) of $219,830, they incurred a total tax liability of $67,399.81. After the tax instalments were paid through the year, they were left with a net tax liability of $12,236.30.
However, on review of their return, and implementing Artist Averaging on their Professional Income, the Total Tax payable was reduced to $21,746.80, resulting in a net benefit of $45,653 to the Artist.
This also subsequently reduced the amount of PAYG tax instalments that were needed for the following tax year.
Case Study 2
Mariah Carey(1) is a professional writer.
On their Tax year professional income of $91,500, and a net taxable income (after all deductions, and including non-business income) they paid tax on a Taxable income of $57,746.
Before using the Artist Averaging provisions, they are liable for tax totalling $9,460.65.
Artist Averaging was then applied to this return, and with the provisions for the first year of averaging, their total tax liability was reduced to $1,154.92 – a saving of $8,305.73 on the same taxable income.
It’s important to remember that you cannot opt-out of income averaging once your income normalises. Also, the concession only applies in “good” years – you will not be taxed more in years where you earn less than the rolling average.
I.e. if your income has been consistently around $80,000 p.a. but then drops in one year to under $40,000, you will pay the ‘standard’ tax you would normally pay on $40,000 for that year. Subsequently, if the following year jumps up to $120,000 (as the project you have been working on is completed and you are paid a lump sum on completion, or the unit sales happen in the following year) then Artist Averaging may reduce the tax payable on the amount ‘over’ $80,000, so your tax rate payable does not jump up significantly.
To show how this works over the years, let’s consider the following case study.
Freddy McQueen, the lead singer of a hard rock band called Mercury, has income over a 5 year period that has ebbed and flowed as CD sales, royalties, writing and recording over new material and concerts were undertaken.
His Net taxable income after all costs and deductions are as follows:
Year 1 – $50,000
Year 2 – $75,000
Year 3 – $120,000
Year 4 – $40,000
Year 5 – $130,000
The tax payable – with and without Artist Averaging over this period would look like this:
| 1 | 2 | 3 | 4 | 5 | |
| Taxable income | $50,000.00 | $75,000.00 | $120,000.00 | $40,000.00 | $130,000.00 |
| Tax on normal rates | $6,717.00 | $14,842.00 | $29,467.00 | $4,142.00 | $33,167.00 |
| Tax on averaging | $ – | $9,625.40 | $22,042.00 | $4,142.00 | $32,717.00 |
| Net Tax Benefit / Savings | $6,717.00 | $5,216.60 | $7,425.00 | $ – | $450.00 |
Income averaging is a specialised area of taxation that can be incredibly advantageous for those in creative professions. However, it’s crucial to enlist the help of a tax professional like Fiscal Artisans to determine eligibility and maximise benefits.
Talk to us for further information, and let’s see if Income Averaging applies to you.
We may even be able to look at your past tax returns and reclaim tax that you may have overpaid. Contact us for further information and a review of your past tax lodgements.
Stuart C Smith CPA
Director
Fiscal Artisans
- Of course, these are not their real names. The facts in the first two case studies are real, but the names have been changed to maintain confidentiality.
- Note that the tax payable amounts do not include the Medicare levy and other related offsets.
- As the Income for the year is below the average over the prior years, there is no rebate claimable for the year, but also, no additional tax is payable on Total Taxable Income.
April Update from Fiscal Artisans
We hope this update finds you well and in high spirits!
We’ve been working hard behind the scenes to make sure our clients are always on top of their financial game. With tax season approaching, it’s the perfect time to reflect on the goals we set at the beginning of the year and assess how we’ve progressed.
Our Team Members – get to know the people behind Fiscal Artisans.
At Fiscal Artisans, we believe that our team members are our most valuable asset. That’s why we’re excited to introduce you to the people behind our financial services. They’re diverse, each bringing their unique skills, experiences, and personalities to the table. From our friendly customer service reps to our highly skilled accountants, every team member is dedicated to providing excellent service and helping our clients achieve their financial goals. We take pride in the fact that our team is not only highly competent but also warm and approachable. So the next time you call or visit our offices, you can feel confident that you’re in good hands with our team of Fiscal Artisans.
Kate Boden – VA
We are excited to introduce Kate Boden, our new VA extraordinaire! With her extensive experience in both administrative and customer service roles, we are certain that Kate will be an invaluable asset to our team. Her attention to detail, strong organisational skills, and ability to multitask will ensure our operations run smoothly and efficiently. Not only does Kate bring valuable skills to the table, but her positive attitude and friendly demeanour make her a pleasure to work with. We are thrilled to have her on board and can’t wait to see all she will accomplish in her new role. Welcome to the team, Kate!
To email Kate for any of your requirements from us, click below
Manish Kalani – Client Manager.
G’day everyone! It’s great to have Manish Kalani back in Oz after a decade away. Manish is returning with his family and embarking on a new chapter, Down Under. For those who don’t know, Manish has been an integral part of Fiscal Artisans since the beginning, churning out the financial nitty-gritty that keeps our operation ticking. But it’s not just about crunching numbers for Manish – he’s excited to get acquainted with everyone and get to know everyone on a more personal level. So welcome back, Manish, and all the best for this exciting new phase in your Aussie adventure!
Tax Planning sessions in April, May, & June
Are you looking to stay ahead of your taxes this year? Look no further than our Tax Planning sessions, held throughout April, May, and June. Our professional team of experts will guide you through the latest tax laws and regulations, providing you with the tools and knowledge needed to minimise your tax bill and maximise your returns. From individual tax planning to corporate tax strategies, our sessions cover it all. Don’t wait until the last minute; book your spot today and make tax season a breeze.
We will be contacting our business clients with a suggested date for our tax planning meeting, but you can also contact Kate at admin@fiscalartisans.com.au or 0400 338 501 to book an appointment. Or go to our appointment booking page for more information and to book in.
Events & Activities – Property Investment Seminar May 3, at 6:30 pm
Are you interested in investing in property and expanding your financial portfolio? Look no further than our upcoming Property Investment Seminar! Hosted by industry experts and seasoned investors, our seminar will equip you with the knowledge and skills necessary to make informed decisions and achieve financial success. We believe that anyone can achieve financial freedom through property investment, and our warm and supportive community will be with you every step of the way. Don’t miss this opportunity to grow your wealth and build a brighter future. Join us at the Property Investment Seminar and take the first step towards securing your financial future.
For more information, please go to: Property Investment Seminar.
We are looking at recording the session for our interstate clients and will have the video available to watch in the forthcoming weeks.
Walking & working with you
Managing finances can be overwhelming in the current economic climate – but having the right team of professionals to help you create a plan and prioritize your objectives is invaluable.
With Fiscal Artisans’ team of experts, you can rest assured that your finances are being managed with utmost care and precision throughout every step of the process. We understand our clients come from different backgrounds – whether you are looking to establish investments or reduce your debt – we will work with you to create an effective action plan!
Be sure to reach out for help so we can provide you with comprehensive solutions for your financial well-being. Take the initiative now – pick up the phone and call us for an appointment: let us help you truly make a difference in these economically trying times.
The Reserve Bank of Australia (RBA) has hiked the official cash rate by another 25 basis points to 2.60%. How will this rate hike impact your monthly mortgage repayments, and when will it happen?
At the beginning of May, the cash rate was just 0.10%. Today it increased for the sixth straight month to 2.60%.
It’s worth noting that the cash rate hasn’t been this high since July 2013, almost ten years ago.
The speed at which the increases have occurred has stressed many. And there are concerns about when it will stop. In reality, the Reserve Bank has probably been too slow, started acting too late, and may keep the rates going too long and then find themselves having to reduce rates sooner than planned.
The time to have started altering the cash rate was probably around July 2021, with small – 0.1 to 0.15% increases perhaps every 1 or 2 months – to cool the market before inflation took off. We don’t know whether there was economic or political pressure to avoid taking action, but we now have an overheated economy struggling to cope with the internal and external pressures evident daily in the news and the financial results personally, locally and globally.
We face further rate rises – perhaps taking the target cash rate to around 4% (a further 1.5% over the next few months) with maybe a pause for 3 – 4 months in 2023 before further ‘adjustments’ become necessary – that could go in either direction. The fact that this was a 25-point rise instead of another 50-point rise points to a possible easing by the RBA as they approach their desired ceiling. Inflation numbers will be key in the coming months – as will GDP and growth numbers. And the October Federal Budget could be a game changer. No pressure on the Treasurer at all!
RBA Governor Philip Lowe said that further increases were likely over the period ahead.
“The cash rate has been increased substantially in a short period of time. Reflecting this, the (RBA) board decided to increase the cash rate by 25 basis points this month as it assesses the outlook for inflation and economic growth in Australia,” said Governor Lowe.
How much extra will your mortgage be each month?
Unless you’re on a fixed-rate mortgage, the banks will likely follow the RBA’s lead and increase the interest rate on your variable home loan soon.
Let’s say you’re an owner-occupier with a 25-year loan of $500,000, paying principal and interest.
This month’s 25 basis point increase means your monthly repayments could increase by almost $75 monthly. That’s an extra $685 on your mortgage compared to May 1.
If you have a $750,000 loan, repayments will likely increase by about $110 monthly, up $1030 from May 1.
Meanwhile, a $1 million loan will increase almost $150 a month, up $1,380 from May 1.
So when exactly will this latest rate rise kick in?
When the RBA hikes the official cash rate, your bank will usually announce its own interest rate hike (and have its own notice period) for variable rates in the following days.
Let’s run through a quick example.
Assuming your monthly mortgage repayments are made on the 20th day of each month.
Let’s also assume you receive a notice from your lender this Friday (October 7) of their own subsequent rate increase, with a 30-day notice period.
By the time October 20 arrives, you won’t be paying higher repayments, as the full 30 days notice would not have passed.
When that 30-day notice finishes on November 6, the daily interest rate you’re charged will increase to the new amount.
That means when your monthly repayment on November 20 rolls around, you’d be charged at the new, higher rate (but calculated only from November 6).
By the time December 20 arrives, the monthly repayment amount you’re charged will fully reflect the new rate.
Some options we can help you explore include refinancing (which could include increasing the length of your loan to decrease monthly repayments), debt consolidation, or building up a bit of a buffer in an offset account ahead of more rate hikes.
If you’re worried about how you’ll meet your repayments in the months ahead, give us a call today. We can work with our associates and look at getting you the best deals on the market – even with your existing bank!
To start that process – and get a clear picture as to what your numbers look like – grab our fact finder at Fiscal Artisans Fact Finder
The Optus Hack – and what you
(and I) need to do with our business data!
It has become common knowledge that Optus has had its database breached.
And this has personal relevance to me, as I am an Optus mobile subscriber, with my business (mobile) number and those of my entire family impacted by the breach. I received the ‘generic’ email from Optus on Saturday (12:51 am. Nice they got it out at a time when it was likely to be buried under a plethora of spam emails), so the awareness of the issue came more from the press reports than the ‘genuine communication’ to its customers.
The key issues we need to look at here are:
- What was taken, and
- How did it happen?
- What does this mean in my situation?
- Stuart, is the data you hold on me safe?
It APPEARS (as Optus has not been crystal clear yet with this information) that their basic database information has been ‘taken’.
This includes:
Full customer name
Date of birth
Phone numbers
Email addresses
Account addresses
They claim that payment details (Bank and credit card numbers?) and passwords have not been taken – just the identification data. But that is bad enough.
Access may also have been obtained to the I.D. document details provided for the ‘100-point check’ each account holder needs to provide.
This would also mean access to items like:
Driver’s licence – state, number and expiry date;
Medicare card number and details; (They have reported that details of at least 35,000 current and expired medicare cards were accessed)
Passport details;
Other items used for verification could be your electricity account details, rates notice, etc.
The danger here is that these details are potentially enough to create a fraudulent I.D. or to assume someone’s identity to do things like:
- Change your bank account details, and get new cards issued to defraud you;
- Alter phone account details, and have your calls and mobile account redirected to someone else;
- Create new credit card accounts in your name that someone else controls (and leave you with a debt or bad credit record).
How did it happen?
While Optus has been claiming that it was a sophisticated attack, it seems the reality is that they left their backdoor unlocked and the lights on. The door might not have been wide open, but it was not far removed from that situation.
Many business systems are set up to ‘talk’ to each other using an interface or ‘API’ to do so.
To explain this, here is an explanation from The New Daily
In basic terms, APIs are ways for computers to pass code between each other (such as instructions). They are often used to enable services such as Google’s weather alerts, which make use of Bureau of Meteorology data.
They are supposed to be safe because companies usually have authentication rules attached to their APIs – but Optus allegedly did not.
“What we’ve seen is there was an API where you pass a phone number, and a phone number’s just … you just keep adding one, and you cover them all eventually,” Mr Hunt said.
“So why was there an API [without user] authentications? That could be a programming error.”
So the system that Optus was using did not have enough security built into it to stop a systematic ‘guessing’ of the key to access the data. It would be like if I could get hold of your ATM card and just keep guessing your PIN time after time without ever being locked out of the process. In time, with enough guesses, I will get access and can get all of your money. In this case, it only takes one correct ‘guess’, and access is obtained to potentially the whole database.
Data security is becoming increasingly important, and more attention needs to be given to this by everyone in business – even if you are a ‘business of one’ and freelancing or self-employed. Again, look at your contact details, the data you hold on your associates, customers, and finance arrangements and think about what data you need to hold – and how secure it is.
It is often considered that your database is one of your greatest assets in a business, and the reality is, that it is also potentially one of your greatest liabilities or risk factors, as you need to ensure you are ‘protecting’ your position and that of your customer base when you undertake your activities.
So, the potential danger here is that the data obtained won’t just impact activity with Optus. It can impact people in other areas.
Like in activity with the Tax Office.
I have been asked by a concerned client to check data on the Tax Agents portal, as it appears that some hackers are trying to change details with the ATO. This could result in tax refunds landing in the wrong bank accounts, GST or other tax claims being made incorrectly, or business entities being created to defraud the government, using false names obtained via a data hack to draw funds out from the ATO.
We will be doing random checks of client data on the ATO site to make sure nothing has changed (and if you are an Optus customer, don’t hesitate to get in touch with us, and I will check your ATO data to make sure it is all ok)
So, what can you do about this?
After spending over 4 hours on the Optus ‘chatbot’ trying to get some clarity on what has been taken – and running into the same brick wall as everyone else on finding out ‘exactly’ what was released, the action that I took was as follows: (and what I would suggest is done by anyone else who is a current Optus Mobile system user)
- Contact VicRoads (or, if you are not in Victoria, your local roads authority) and request a new driver’s licence with a new number. They will also ‘flag’ that the current licence may have been compromised and can’t be used for I.D. verification. I don’t think it will get you out of any speeding or redlight fines, however. Sorry about that!
I found the process with VicRoads took all of 5 minutes and 5 lines of information. So unlike dealing with Optus, it was painless; - Contact Medicare via MyGov, and request a new Medicare card for you and your entire family. They will issue a new card with essentially the same details but ‘moved on’ sequentially. Again, this will override the ‘old’ cards and make the number redundant.Again, the Medicare website has been set up to deal with this Optus issue, and the process is simple.
- Passports – this appears to be a harder scenario. Currently, it does not appear that the Passport office will ‘simply’ process new passports to replace any that ‘may’ have been compromised. And it will come down to finding out precisely what data Optus received and held regarding I.D. for their customers.News Flash! Optus has now agreed (Been made to!) to pay the cost of passports that need to be replaced due to data being released through this breach. The replacement process is still to be determined, so keep an eye on the Passports Australia website and contact Optus to confirm if these details have been accessed. As mentioned above, they are still to provide full details of what data has been accessed and what I.D. documents they retained on their files.
- There are various ‘data monitoring’ sites available (Optus is funding a 12-month subscription to Equifax to those impacted who shout loud enough) that will let you know if changes have been made to any of your accounts. It may take a bit of work to set everything up, but it will only take one notification of fraudulent change to make the subscription worthwhile.
- Contact your banks and financial institutions, change your passwords, online pin numbers, etc. Make sure that the systems are set up to contact you with any changes made on your accounts, so you can act quickly if any suspicious activity has occurred.
The need for security over a business’s data is significant, and everyone in business needs to look at this situation and identify the lessons relating to their own data.
As business owners, we hold a large amount of data on our clients – and also on our suppliers, financiers and associates. And, the more ‘automated’ we make things, the more data we hold to make that possible. E.G. ID numbers such as ACN, ABN, TFN, Director IDs, driver’s licences, bank accounts, addresses, date of birth, etc., are all recorded. If that data is hacked, it becomes easy for an identity to be duplicated or to change and divert the information.
- Look at what data you hold for your customers., clients, suppliers etc., and what security is used to access those details. And what do you need to retain once identification has been confirmed, or the ‘transaction’ has been completed?
How is this stored and saved? Who has access to this data? What checks can you make to see if changes have been made without your knowledge? - What is needed to access your database? – is it just a password, or have you set up 2-factor authentication? Many online systems require this, but I have noted that many people fail to take it up if they can avoid it. The lesson is – DON’T AVOID IT. It is like leaving the key under the mat for your front door. Sure, the door is locked, but finding the key is not as hard as you want to believe it is.
- Do you use the same password for multiple sites? I know, remembering multiple passwords is a Pain in the pass-word, but the frequency of database hacks makes keeping them unique more and more important. You can use programs like Last Pass to keep track of your different passwords – and create unique, hard-to-crack passwords or passphrases for each site you use. This type of system will also ‘flow’ through to all your devices, so you don’t have to keep track of them separately. (At Fiscal Artisans, we are using Last Pass, and it works well on computer browsers and mobile phone systems)Most mobile phones can also help you create unique passwords stored on the phone, so you don’t have to remember them (Just keep your phone security tight!)
- If you use your mobile phone to access most sites, it is not hard to see which sites have duplicated passwords – and which ones have potentially been compromised. You can usually find this in Settings/passwords/security recommendations. Your web browser (such as Google) or your computer setup may help you with this process. Keep them unique, combining UPPER and lower case letters, numbers, and special characters. And don’t use easy-to-remember words or numbers that relate to you, like your birthday, middle name, or kids’ names.
Ok, so what are we doing about this?
This is how we operate in terms of Fiscal Artisans with our data.
- All of our operating system access requires 2FA, meaning that as well as a password, all access requires a code that can only be obtained via my phone (which is pretty much permanently embedded with me). All staff use unique 2FA access, log-ins and passwords for their access to our systems as well.
Unique passwords are used for all systems, and these are kept secure at all times. - All paperwork and related data for clients, such as questionnaires and paper copies of data that have been emailed to our clients, is scanned, then shredded if it does not need to be saved or stored or sent as a hard copy (and the shredded paper is turned into garden compost and worm food!) so no data or client information is disposed incorrectly, or kept beyond the time it is needed.
- Where former clients have ‘moved on’ and are no longer using our services, any data we hold for them is taken ‘off line’ from our systems and kept in a separate archive system until the required period has elapsed. Then, after around 7 years, that data is deleted and completely purged from our systems.
- We only share data that you have agreed to be shared with associates and will always ‘copy you in’ to communications of data provided to third parties like finance associates, legal advisers etc.
- We review our systems frequently to ensure that data is stored correctly, security is maintained at a high level, and superfluous data that is not needed is removed.
We suggest that all business operators look at their systems and determine if changes need to be made to increase their security over the data they hold.
We are happy to assist and advise around your data management, and we can assist you with associates who can provide you with the services needed to improve your data security.
Meanwhile, please check your own systems and make sure that they are as secure as possible.
After all, you wouldn’t leave your front door open or leave the keys in your car would you?
Treat your data with the same level of security.
Enjoy your weekend – and check your data security!
For more information, or to discuss your own data situation, please email me at stuart.smith@fiscalartisans.com.au or call me on 0409788399.
Stuart Smith CPA
Director
Fiscal Artisans.
Australian Domain name changes are about to go live.
Australians have until 20 September 2022 to seek priority allocation of an .au direct domain name that matches their existing domain name.
Anyone with an Australian presence (including businesses, organisations and individuals) can now register a new domain name category, known as .au direct. These shorter, simpler domain names will end in simply ‘.au’ (e.g. mybusiness.au) and complement existing namespaces such as ‘com.au’, ‘net.au’, ‘org.au’, ‘asn.au’, ‘id.au’, ‘gov.au’ and ‘edu.au’.
Existing domain name licence holders have been provided priority to register the .au direct equivalent of their domain names until 20 September 2022, after which domain names that have not been allocated will become available to the general public.
This new option for domain names creates opportunities for businesses, organisations and individuals. However, it could also provide another opportunity for cybercriminals by facilitating fraudulent activity like business email compromise. For example, by registering yourbusiness.au where you have already registered yourbusiness.com.au to impersonate your business.
The ACSC recommends that all Australian businesses, organisations and individuals consider taking advantage of the priority allocation process to register the .au direct equivalents of their existing domain names. In cases where conflicts occur, such as when different organisations own similar domain names (e.g. mybusiness.com.au and mybusiness.net.au), priority allocation will help determine who can register their .au direct equivalent. Until 20 September 2022, registrants of .au domain names licensed before the launch of .au direct have priority to apply for the matching .au direct domain name.
After this date, it may be possible for ‘cyber-squatters’ to register ‘your’ domain name and seek to impersonate your website or use it for various fraudulent activities, or simply ‘squat’ on your name and potentially look to sell your own site back to you.
Businesses, organisations and individuals who have registered a domain name outside of Australia can also consider registering an .au direct domain name. For example, a business that currently holds mybusiness.com should consider registering mybusiness.au. This will prevent cybercriminals from registering these domain names and using them for attempted financial fraud.
You can reserve your .au direct domain name by visiting an auDA accredited registrar.
If your business or organisation is a victim of business email compromise or other fraudulent activity, please report the incident to the ACSC through ReportCyber or contact 1300 CYBER1 for support. auDA also has a complaints process available you can access through their website.
Online, real-time tax time? Big Brother WILL be watching you!
In the attached article is a rundown of the speech given by the ATO commissioner Chris Jordan at the Xerocon 2022 conference in Sydney this week.
The ATO is looking to have a fully digitised, online and REAL TIME payment of tax happening.
And they want this to happen by 2030.
What does this mean to you in business?
It could mean that the ATO will be looking to receive tax payments like GST and PAYG when the transactions occur – online, in real-time.
I have seen Stripe payments reported for sole traders on the ATO prefill reports as a separate source of income, so the reality is that they are well on the way towards having all the data on hand in real-time. With STP and online payroll systems, it is currently a ‘one-button press’ for regular payroll reporting.
The next phase will clearly be for automatic payroll reporting when the pay run has been finalised. Then perhaps the following stage will be an automatic drawdown of the PAYG and superannuation payments that are due, as each pay occurs.
Or as an ‘automatic drawdown’ on a set date each month, without any paperwork being prepared and lodged with payments following up later.
What do you need to do as a business owner to prepare for this?
Talk to your accountant – or get one if you don’t have one already.
And get your systems in place to ensure you know how your business is going, how strong your cash flow is over the months ahead, and make sure your plans and projections are in place.
Ensure that your payment and receivable systems are working properly and that your invoices are being paid regularly. Are you managing this yourself? Do you need support, and perhaps professional management of this?
Work with your accountant and bank to get the right support – overdrafts, credit limits etc. to manage your cash flow requirements.
For accountants, the focus will be far less on ‘churn and turn’ preparation of annual tax returns, where they provide a low cost, quick process, and high volume (and probably no advice) service. Instead, accountants will need to be focused on helping businesses manage their operations, grow their businesses, and adhere to their financial obligations.
Your accountant should be your business partner, that can help you:
Go Beyond The Numbers.
To discuss this, and to look at how we can help you grow your business contact us at 0409788399 or at info@fiscalartisans.com.au
Australian Federal Budget 2022
The AfterPay Budget
Vote Now Pay Later!
Last night, Treasurer Josh Frydenburg delivered the Australian Federal Budget for the next 12 months. But in reality, with the election about to be announced – with an expected poll date of May 14, 2022, (the PM mentioned this date on 2GB this morning) the budget’s main aim is solely to get the Government to that date, and, they hope, elected, despite all polling indications, for a further term of Parliament. The key elements announced and widely reported relate to what the Government calls ‘cost of living’ support. With costs rising over the last few years and significantly in the last few months due to rising fuel prices, supply issues and a lack of wage rises for most Australians, a ‘correction’ in the economy, with an easing of the financial pressure that many have been feeling over the last few years is desperately needed. So what has been offered and forecast?
$250 one-off payment to those on the following payments:
- Age Pension.
- Disability Support Pension.
- Parenting Payment.
- Carer Payment.
- Carer Allowance (if not in receipt of a primary income support payment).
- Jobseeker Payment.
- Youth Allowance.
- Austudy and Abstudy Living Allowance.
- Double Orphan Pension.
- Special Benefit.
- Farm Household Allowance.
- Pensioner Concession Card holders.
- Commonwealth Seniors Health Card holders.
- Eligible Veterans’ Affairs payment recipients and Veteran Gold cardholders.
The payments are exempt from tax and will not count as income support for the purposes of any income support payment. A person can only receive one economic support payment, even if they are eligible under two or more categories outlined above. The payment will only be available to Australian residents. This is a one-off payment and NOT an ongoing increase to any of these benefits. The ongoing discussion of the appropriate level of support for pensioners and Jobseekers has not been addressed In the budget. The payment will occur in April 2022 – i.e. after the election has been called but before the polling date.
Temporary reduction in Fuel Excise
The Government will help reduce the burden of higher fuel prices by halving the excise and excise-equivalent customs duty rate that applies to petrol and diesel, and all other fuel and petroleum-based products except aviation fuels, for six months. This measure will commence from 12.01 am on March 30 2022, and will remain in place for six months.
However, this may take 2-3 weeks to be seen ‘at the bowser’ as existing stocks are sold and then replaced. Ongoing fluctuations of the crude oil price, production costs and exchange rates may add to or diminish any benefit actually seen at the bowser.
Note that the calculation of indexation will continue to happen over the 6 month period that this ‘relief’ will occur, so when the excise is returned to its ‘normal’ levels in October, we may see a price increase that is well above the 22 cents per litre reduction that we are currently hoping for.
Increase in low and middle-income tax offset
For a number of years, there has been a ‘non’ cash refundable’ tax offset that has been continually extended for ‘one more year’. We have this situation again, but this time with a last ‘bonus’ of $420.
This is the “$420” relief payment that has been described as a ‘cost of living’ tax offset in the budget.
It will apply to everyone who has a taxable income of LESS then $126,000, and its timing is dependent on the lodgement of your 2022 tax returns. i.e. it will NOT be paid before July 1, 2022, and may not be received by many until well into the second half of the year.
Note also that if your total tax payable is less than the total value of the rebate, you may not receive all or any of the benefits.
What has not been mentioned is that this is – at this stage – the FINAL year of this offset, which has been extended year after year for some years now. With the stage 3 tax cuts due to be introduced in 2024-25, people on ‘middle incomes’ ($45,000 to $126,000) will face an effective tax increase in the 22/23 year (i.e. from July 1), So while anyone with an income under $126,000 will receive a benefit of an extra $420 after July this year, they face an additional tax take of $1,080 after July next year. The ‘Afterpay’ effect!
Changes effective for business – and ‘creating growth opportunities’
Skills and training boost.
The Government will introduce a skills and training boost to support small and medium-sized businesses to train and upskill their employees. The boost will apply to eligible Expenditures incurred from 7:30 pm (AEDT) on March 29 2022 (i.e., Budget night) until June 30 2024, by Small and medium-sized businesses (with an aggregated annual turnover of less than $50 million) will be able to deduct an additional 20% of Expenditure incurred on external training courses provided to their employees. The external training courses will need to be provided to employees in Australia or online and delivered by entities registered in Australia.
Some exclusions will apply, such as for in-house or on-the-job training and Expenditure on external training courses for persons other than employees. (Without any legislation, this is open to debate, but it may mean that directors of companies/self-employed business owners CANNOT claim their OWN external training. But until we get details, we cannot be certain. That is not likely to occur until after the election as the changes required for this are not likely to pass through Parliament before the election.)
But while this applies to eligible Expenditure incurred from today, the actual benefit (tax deduction) will not occur until June 30, 2023. i.e. Expenditure from today to June 30, 2022, can ONLY be claimed in the NEXT tax year.
So, using Frydenburgs example from budget night. If you spend $100 on training your staff ‘today’, you can claim a $120 tax deduction (which, with a corporate tax rate of 25%, gives a tax benefit of $30 in 2023 instead of $25 in 2022) and reduce your tax sometime after July 1, 2023.
Technology Investment Boost
The Government will introduce a technology investment boost to support digital adoption by small and medium-sized businesses. The boost will apply to eligible Expenditures incurred from 7:30 pm (AEDT) on March 29 2022 (i.e., Budget night) until June 30 2023.
Small and medium-sized businesses (with an aggregated annual turnover of less than $50 million) will be able to deduct an additional 20% of Expenditure incurred on business expenses and depreciating assets that support their digital adoption (such as portable payment devices, cyber security systems or subscriptions to cloud-based services).
An annual cap will apply in each qualifying income year so that Expenditures up to $100,000 will be eligible for the boost. This equates to a maximum additional deduction of $20,000 per eligible year.
For eligible Expenditure incurred by June 30 2022, the boost will be claimed in tax returns for the following income year. For eligible Expenditure incurred between July 1 2022, and June 30 2023, the boost will be claimed in the income year in which the Expenditure is incurred.
Whether this applies to current subscriptions (such as Xero, office 365 etc.) that are being used or only ‘new’ acquisitions is unclear. And, in the same way, as the ‘skills’ boost, anything incurred that can be claimed in the current year will not be claimed – or provide a tax benefit – until the end of the 22/23 tax year – so the ‘financial benefit’ will not be seen until after July 2023.
Varying the quarterly tax instalments
For those who have ongoing PAYG instalment payments (company tax instalments, investment income or sole traders), the annual calculation of the instalment has often been based on ‘last year’s income plus 10%’ to work out the expected income on which the tax is calculated.
For the next 12 months, the Government has reduced this ‘uplift’ to 2%, so the amount required to ‘cover’ the quarterly instalment will be lower.
While this will assist cash flow in the short term, the kicker is that if your business HAS increased its profit substantially in the year, it will have a LARGER year-end tax bill, as you will have paid less tax ‘as you go’.
The next change – proposed for January 2024 – is to base PAYG instalments on the ACTUAL quarterly performance “Where Business accounting software permits this”. i.e. we may be approaching the need to lodge ‘adjusted profit reports each quarter’ to calculate the tax instalment that needs to be paid. This may have some benefits where income and expenses are very ‘seasonal’ or where there is a large fluctuation in profit each quarter, meaning less tax is paid when times are harder and more paid when funds are flowing – but it will also require all businesses to be ‘on the ball’ with their accounts every month to keep track of their tax liabilities as they go. There will be more on this AFTER the election!
Apprentices and trainees
The Government has extended its support in boosting the apprenticeships scheme, providing A$5000 payments to new apprentices over two years and extending subsidies of up to A$15,000 for employers who take them on.
Frydenberg said the Government would also support an additional 800,000 training places with a A$3.7 billion investment.
Will there be sufficient funding for the TAFE places required for these apprentices? And will they be limited to specific industries? We await more details.
Infrastructure
The budget also makes commitments to several strategic infrastructure projects around the country.
There are budget commitments for faster rail projects from Brisbane to the Sunshine Coast, from Sydney to Newcastle, Perth’s METRONET project, the North-South Corridor in South Australia, Great Eastern Drive in Tasmania, and Central Australian Tourism Roads in the Northern Territory.
There is also an investment in the Melbourne Intermodal Terminals to increase the efficiency of the national freight network, and more than A$500 million for local councils to deliver priority projects and A$880 million to better connect regional Australia with ports, airports and other transport hubs.
The worry here is the usual – announcements, not action. And As Leigh Sales on 7:30 last night stated – if you overlay the location of most of the announced plans with the electoral map, they are focused on marginal seats, or seats that the Government need to retain or win. Infrastructure Australia has approved only 12% of the projects, so the announcements don’t tie in with economic or social priority or need in many cases.
Ok, so what are the costs and the losses?
Renewable energy
Federal government spending on climate change measures will decline every year for the next four years. This includes the spending on carbon credit purchases, the Clean Energy Finance Corporation, Australian Renewable Energy Agency and the Clean Energy Regulator. Spending will drop from $2 billion in 21/22 to $1.3 billion on 25/26. We are 7 years from the 2030 ‘threshold’, and the Government is reducing its activity in this area. Any change will need to come purely from the ‘market’ or state government action.
You would think that the Lismore floods, the bleaching great Barrier Reef, and the constant downpours in Sydney would have affected policy action.
The Rise and Fall of The Arts
It seems that far too many see this area as being ‘just a nice thing to have’, forgetting the size of the industries involved – Film, TV, Music, Theatre, galleries, pubs, clubs, dance etc. But it falls away for some when it comes to the economic factors. A $111.7 billion sector in 2018 – 6.4% of GDP. But not considered worthy of a separate ministerial portfolio in the current Parliament.
Total Federal spending is forecast to reduce by 20% in 22/23, with a $140 million reduction in the RISE funding – from $160 million to $20 million, and then no further after the 22/23 year. This funding supported the ‘rebuild’ of various festivals, tours, exhibitions etc., but needs to continue to help rebuild a sector that was decimated over the last 2 years. There is no growth (beyond marginal CPI increases) in any other part of the Arts funding either. In fact, the total funding is expected to fall from $799 million in 22/23 to $744 million in 25/26. Australian Music Administration spending drops from 6.3 million in 22/23 to nothing in 24/25. Regional Arts funding falls from $18 million to $7 million in 22/23.
At a time when Film Production and post-production, animation, gaming, and music production has the ability to grow and be globally significant, with an “Australian flavour”, the support to grow the sector in all parts of the country is being removed.
Do you wanna build a submarine, I mean a snowman?
Ring the bell – its closing time…
With the ‘end of the pandemic’ and lockdown provisions, a number of the policies put in place over the last few years are now ending.
Temporary Full expensing will finish June 2022 – so if you want to claim a full 100% tax deduction ‘up front’ for your equipment or business vehicle purchase, it now MUST be ordered by this June 30 and installed for use by June 30, 2023. Any expectations that this would continue have now finished, and from July 1, 2022, the previous depreciation rates will apply again.
This may also have implications for other ‘instant asset write-offs’, which will need to be examined as regulations and legislation are put in place.
The forecasts!
The budget forecasts that a ‘strong labour market’ will mean an unemployment rate of less than 4%. They say that this will drive wages growth with a forecast increase of 3.25% in wages over the coming year.
But, Unemployment is being defined as Less than 1 hour of work per week. If we used the same definition as the last time Australia had a sub 4% unemployment rate, we would be looking at something closer to 16.3% taking into account the underemployed levels, so the expectation of wage growth, being based on ‘supply and demand issues alone’ has to be tempered by this factor. Wages won’t necessarily rise if a large pool of underemployed staff can simply have their hours extended instead of being paid ‘more per hour’.
Inflation is forecast to reduce from 4.25% to 3% 2.75% in 23/24, but this will be very dependent on commodity prices falling (including oil), supply change improvements, and exchange rate stability. Any or all of these factors could see inflation stay over 4% p.a. or climb higher – which may lead to interest rate adjustments happening sooner rather than later.
The deficit for the current year is now forecast to be $80 Billion – down by $20 Billion on last year’s forecast (due to higher commodity prices for what we dig up and ship overseas), and ‘stabilise’ at around $78 Billion for the 22/23 year. With ongoing tax revenue increases – arising out of wage and profit growth leading to more tax being paid – the budget is still expected to be $40 Billion in deficit in 25/26.
The Treasurer claims that we have ‘turned the corner’ because the debt peak will now be ‘not as high’ and ‘a bit sooner’ than previously forecast. This sounds like the “Back in Black” pronouncements in the year before the pandemic – which were already proven wrong before that nasty little virus shut most of us into our homes and 5 km walk zones for the last 2 years! A treasurer’s forecasts are often as accurate as the old Lou Richards Kiss of Death Football Tips, so we take much of this with a large pinch of salt.
Total Government spending is around 26% of GDP – It never peaked above 23% of GDP under the previous Labor government. Tax revenue is around 24% of GDP (also higher than the Labor years). So, currently, the Government has what is called a ‘structural deficit’ (in basic terms – it is spending much more than it is earning). While I won’t fall into the simplistic’ home budget’ comparisons, and there are many who will argue that it does not matter if a government runs deficits all the time (as who is going to bankrupt them?), it is much like developing a business – at some point in time, you DO expect that the revenue is going to be greater than the spending, and you recover some or all of the money that you have spent or invested in getting the business going. Repeated waste and inefficiency or politically motivated decisions make this harder to overcome, and governments need to improve their performance in this aspect regardless of their political colours. Much of the deficit could be recovered in this way. E.g. Defence spending, while overall being necessary, has seen so many examples of botched equipment purchases that have cost billions and produced nothing. This money could have been re-purposed for far better uses and saved considerable money and pain.
In the words of Ross Gittens in the Age / Sydney Morning Herald:
This budget is not as fiscally responsible as the Government would like you to believe when it’s claiming to be the party of good economic management, but nor is it as fiscally irresponsible as it would like you to believe when it is claiming to have fixed your problem with the cost of living.
We await the Opposition’s reply, and let the election campaign begin!