Small business operators in Australia are among the big winners from the 2015/16 Federal Budget handed down by Treasurer Joe Hockey last night.
Tax cuts and incentives were at the core of a new program designed to promote investment and employment among small businesses, with the Treasurer repeating “now is the time to have a go”.
Changes include a new company tax rate of 28.5 percent for organisations with an annual turnover of less than $2 million (down from 30 percent), and unincorporated businesses receiving a five percent tax deduction of up to $1000.
Furthermore, small businesses will be able to immediately claim a tax deduction of up to $20,000 for assets purchased.
The Victorian Automobile Chamber of Commerce (VACC) voiced its support for budget measures aimed at small business, with Executive Director Geoff Gwilym saying “this is a budget for small businesses who want to innovate and grow”.
The VACC was also in favour of new tax laws designed to ensure huge multinational companies can’t escape paying taxes in Australia by shifting profits offshore, and increasing GST revenue from overseas business through the likes of the ‘Netflix tax’ on internet downloads.
But the Chamber expressed disappointment that its pre-budget call for the Federal Government to dump the Luxury Car Tax (LCT) was ignored.
“Ditching the LCT is particularly relevant at a time when the Government is considering the deregulation of new car imports in the name of improving vehicle affordability,” Mr Gwilym said.
“We urge the Federal Government to reconsider relaxing current new car import restrictions and for it to realise that cutting the luxury car tax will do the very thing it is trying to achieve; make new vehicles more affordable for Australians.”
The government did make one small concession on the LCT however, allowing museums acquiring cars for public display to be exempt from the tax on luxury cars.
What You May Have Missed
With all the noise about childcare, aged pensions, protection from terrorism and more in the weeks leading up to the budget, one could easily be distracted from some of the ‘quieter’ budget news.
For example, the Federal Government has allocated $250,000 to the city of Bathurst as it celebrates its bicentenary, and has plans to alter legislation to allow foreign vessels to carry petroleum products when sailing on Australian waters in the face of growing uncertainty over local fuel supplies.
It may surprise some to learn that the $3 billion for Victoria’s East West Link is still on the table.
Should the current state government be dismissed by voters after one term like their predecessors - or display an unlikely ‘change of heart’ - the $3 billion is still available to see the project go ahead.
But the Federal Government announced Labor in Victoria has now made its intentions to dismantle the project clear.
While expressing disappointment at the decision, the Federal Government said it is perhaps open to reallocating some of the monies to other projects “of national significance”.
One item that was included in Joe Hockey’s budget speech was a plan to develop parts of northern Australia in Queensland, Western Australia and the Northern Territory.
Over four years, $3.7 million from a $5 billion package will be allocated for infrastructure planning in the north to boost productivity - including new roads. A further $100 million will improve roads and supply chains for getting cattle to market.
Which existing roads will see a slice of the funding is unclear, but Western Australia will also benefit from a one-off $499 million payment to assist with the easing of the mining boom; some of which is likely to be spent on road projects as the state attempts to tackle its unsteady road toll.
Around $187 million destined for Victoria’s Regional Rail Link project will instead go to part-funding duplication of the Western Highway between Ballarat and Ararat and the Princes Highway between Traralgon and Sale.
A minor budget saving of $1 million comes through the early termination of the Seatbelts on Regional School Buses program.
The Federal Government says the states and territories are moving forward with their own school bus seatbelt programs, and federal assistance is no longer required.
Some of last year’s federal budget is still locked up in the Senate, with Labor, the Greens, other minor parties and independents blocking key savings measures and new legislation.
As parts of the 2015/16 budget are set to face the same Senate hostility, time will tell if any, some or all of these new measures are passed.
If not, some political analysts are foreseeing an early federal election, saying the 2015/16 budget is designed as an election pre-sweetener if need be.
Watch this space…
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