Federal Budget 2017: What it means for you
The Treasurer Scott Morrison presented the Federal Budget 2017 proposals to Parliament last night on Tuesday 9th May. We've broken it down to explain what's been announced and what it might mean for you.
How it will impact your small business
The Federal Budget announcement has outlined a number of benefits for Australian small businesses, including an extension to the asset write-off program for an additional year, a commitment to lowering taxes and moves to incentivise states and territories to reduce red tape.
Asset write-off extended
The government has extended the $20,000 immediate tax deductibility threshold for a further 12 months to 30 June 2018. The turnover threshold has also been increased to $10m in annual turnover.
Commitment to lowering corporate tax
The government has reaffirmed its commitment to cutting the corporate tax rate for all businesses to 25% as part of the Ten Year Enterprise Tax Plan. This is further to the recently legislated tax cuts for small and medium businesses.
Reducing Red Tape
Under the new National Partnership on Regulatory Reform, the government will provide $300m over two years to incentivise states, territories and local governments to lessen the regulatory burden on small businesses. By reducing red tape and regulation, the government outlined that it is seeking to “help small businesses by levelling the playing field in the market, decreasing business costs and giving businesses more time to run and grow their business”.
Business and Innovation
The big themes for Australian business in this year’s budget have been delivered – led by infrastructure spending and the prospect of lower taxes.
Infrastructure and Investment
Continued investment into a range of infrastructure initiatives was one of the hallmarks of this year’s Federal Budget 2017. The government is establishing a 10‑year allocation for funding road and rail investments set to deliver $75bn in infrastructure funding and financing from 2017-18 to 2026-27.
Economist Michael Blythe said in a note released after the Federal Budget was announced that the focus on infrastructure is “growth friendly”.
“We have long argued that the best form of fiscal stimulus is infrastructure spending," Blythe said. "Such spending boosts demand in the short term and lifts supply over the longer haul.”
Lowering corporate taxes
The government has reaffirmed its commitment to cutting the corporate tax rate for all businesses to 25% as part of the Ten Year Enterprise Tax Plan. The government also indicated that following lower tax rates for small and medium businesses, tax cuts remain on the agenda for businesses with annual turnover in excess of $50m.
“The ongoing plan to extend company tax cuts to the big end of town remains in budget figuring,” Blythe said. “And the leftover parts of the Enterprise Tax Plan are a necessary economic reform and essential to maintaining international tax competitiveness.”
What it means for families
Treasurer Scott Morrison committed to "tackle the cost of living pressures for Australians and their families" and "guarantee the essential services that Australians rely on."
The Federal Budget contained a multi-billion dollar healthcare package with a plan to increase hospital funding by $2.8bn and $1.4bn to be invested into health research over the next four years. There would also be $1.2bn put into new medicines.
The Federal Budget outlined plans to expand the ParentsNext program - which includes child care, pre-employment training, financial literacy and numeracy skills as well as other education and training opportunities - from 13,000 vulnerable young parents to 68,000 in 20 new locations.
Keep in mind
Any changes outlined in the Federal Budget must be passed by both the House of Representatives, which is controlled by the government, and the Senate, where proposed expenditures are subject to examination within Senate estimates hearings. This means any proposed cuts or changes outlined above may not necessarily become law.