The government revealed in tonight’s budget that unincorporated businesses turning over less than $5 million annually will be eligible for an 8% tax personal income tax “discount” from the start of July, up from 5% past year.
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The definition of “small business” has also been widened, with maximum annual turnover for businesses eligible for the new tax rate increased from $2 million to $10 million. The threshold would be progressively increased until all companies were taxed at 27.5 percent by 2023-24.
A bunch of changes to superannuation rules – the best news is that low-income earners will benefit from a tax offset.
Major tax changes for small and midsize businesses, including an increase in the small business threshold to $10 million and reduced tax rates.
“In this Budget we will continue to cut unnecessary waste and keep government spending under control to balance the budget over time”.
The government also developed a new programme for young people which would help up to 120,000 young people over four years to secure jobs.
The budget also had no mention of changes to the controversial “backpacker tax”, infuriating farmers and fruit growers.
Treasurer Scott Morrison delivers his Budget speech in the House of Representatives on Tuesday.
With the exception of negative gearing, the budget seeks, and appears to hit, all the hot buttons now top of mind for Australian consumers and business.
The budget showed that plan would be funded mainly by spending cuts across government, amid government coffers falling another $20 billion into deficit, down to $39.9 billion, since last year’s forecasts.
Tech companies have become infamous for moving their profits around the world in search of favourable tax rates, and now Australia wants to make sure they are paying their fair share. “There is no question that Australia’s company tax rates are excessive by global standards”, he added.
Generous superannuation tax breaks will be closed off from July 1, 2017, affecting about four per cent of Australians each year.
To ensure the budget is on track for balance in 2020/21, tobacco taxes will be hiked by 12.5 per cent a year from September 1, 2017, to raise $4.7 billion over four years.
The government said the 2016-17 deficit was estimated to come in at Aus$37.1 billion (US$28.1 billion), or 2.2 percent of GDP, with Morrison touting a need for Australia to “live within our means”.
It allows both Morrison and Turnbull to claim a reputation as serious economic managers rather than expedient populists, but we have to take on trust their ability to deliver the outcomes given their relative inexperience (and tetchiness) in the two most senior roles in government.
“Supporting innovative firms to seize new opportunities will create competition, access to new markets and employment growth”.
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Social media exploded last night, with Twitter receiving more than 79, 000 budget related tweets since 10am Tuesday.
