The first round of measures are expected to bring in as much as $700 million to Australian coffers in the first year.
Advertisement
The Treasurer says the top tier of the middle-income tax bracket will be lifted to US$87,000, from AU$80,000. Those people are working hard.
Taxes from growing superannuation reserves are rising by 24.2% over the next two years, the GST is growing by 11.4% and personal income tax by 14.7% over the same period.
Tuesday’s budget unveiled a new “diverted profits tax” similar to a scheme introduced by Britain’s Conservative Government which taxes multinationals on income they have sought to shift offshore at a penalty rate of 40 per cent. A new Tax Office taskforce with more than 1000 specialist staff to police and prosecute companies was announced along with other changes to close tax loopholes. “Based on analyses of the benefits of previous tobacco tax increases, 320,000 smokers are likely to quit over the longer term as a result of an expected series of 12.5% annual tobacco tax increases”.
“We turned Labor’s [carbon tax] compensation into an actual tax cut for people earning less than $80,000”, he said when asked why the bulk of working families did not benefit from his budget.
This is the right plan for Australia to overcome the challenges of economic transition and to clear a path for long-term growth and jobs in a stronger, new economy.
See more on the winners and losers in this year’s budget below.
As many as 350,000 small Australian construction business could be on track to receive a tax break as the federal government makes its commitment to support small business as the election draws near.
“These measures, including from the multinational tax avoidance legislation, will raise an additional A$3.9 billion in revenue over the next four years”.
· Fixing the tax system so the government’s responsibilities can be covered.
“I’m not claiming that this is some great big tax cut at all”, he told reporters.
Business Council Chief Executive Jennifer Westacott described the budget as “responsible”.
Major tax changes for small and midsize businesses, including an increase in the small business threshold to $10 million and reduced tax rates. Last year’s “Tony’s tradies” instant asset write-off for purchases up to $20,000 will be extended for a year, and also available to all businesses up to $10m. That threshold will also continue to rise up until 2023.
Tax cuts for businesses and support for innovation were some of the key highlights of the Treasurer’s Federal Budget speech.
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”.
“Tax cheats will be tracked down and face the full force of the law”, he said.
Advertisement
It appears as if this budget is about two things: neutralising Labor’s lines of attack for the election and playing up the government’s economic management credentials.
