This plan starts with tax cuts and incentives for small and medium-sized businesses which are the engine room of our economy. This trend is set to continue in the years ahead.
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The lowering of tax with the budget promising to reduce the rate a further 2.5% down to 25% by 2025-26.
Morrison said in his budget speech: “We need to ensure that our superannuation system is focused on sustainably supporting those most at risk of being dependent on an Age Pension in their retirement, which is the objective of these concessions”.
These small enterprises will have their tax rate reduced, including a 2.5 percentage point cut in the tax rate for up to 60,000 businesses with a turnover between $2 million an $10 million.
Savings will also be achieved by cutting back on superannuation concessions to those earning more than $250,000 a year, and other changes to super to favour those at the bottom end of the scale.
The move follows tax transparency legislation the government passed in late 2015, which aimed to force hundreds of Australia’s largest companies to be more transparent about their tax bill.
“They look appropriately conservative”, Mr Blythe said. For 2018-19, it will go up to $50 million, and to $100 million in 2019-20.
The Coalition Government will also extend the unincorporated tax discount to businesses with an annual turnover of less than $5 million and will increase the discount to 8 per cent capped at $1,000.
Just hours before the Budget was delivered, Australia’s central bank revealed it was cutting interest rates to a record low of 1.75 per cent, partly because of unusually low inflation and global uncertainty.
Some Aus$2 billion would be invested in water infrastructure projects and Aus$3.4 billion allocated for urban rail projects, Morrison added in a budget he called “a practical, targeted and responsible economic plan”.
At the core of the Youth Employment Package is the Youth Jobs PaTH (Prepare-Trial-Hire), a $751.7 million initiative to help maximise the chances of job seekers under 25 getting a job.
As with every federal budget, some Australians walk away better off while others find themselves worse off.
The government will offer 120,000 internship places over four years for out-of-work youngsters. Businesses who accept interns will receive an upfront payment of $1000. Existing wage subsidies (Indigenous, long-term unemployed, etc.) will also be “streamlined” to make them easier for employers to access.
Business groups welcomed the Budget as positive and sustainable. The budget allots considerable portion to the national innovation and science agenda, as well as the previously announced cyber security offensive strategy.
But McCalman questioned how much tax Australia would raise from the DVT alone, given worldwide tax treaties meant Australia had foregone the right to tax certain income.
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A Tax Transparency Code will also be introduced to encourage greater tax transparency within the corporate sector.
