Federal Budget - What the budget means for you?
Workers, small business owners and Australia’s bottom line are among the big winners in last night’s Federal Budget.
This year’s Budget focused on strengthening the economy, lowering taxes and creating more jobs to secure a better future for Australians and while we’ll all act impressed and try to understand exactly what that means, all we want to know is exactly what’s in it for us.
- Small business tax cuts have been brought forward by five years, taking their tax rate from 27.5 per cent down to 25 per cent
- The instant write-off has been extended to cover assets up to $30,000 for businesses with turnovers less than $50 million
- There is an increase to the 10-year infrastructure budget from $75 billion to $100 billion.
- A $525 million skills package to create 80,000 new apprenticeships
- This year’s Budget extends existing tax relief for small and medium businesses
- After dropping its politically unpopular big business tax cuts, the Government has focused on the smaller end of town, bringing forward tax cuts and expanding the instant asset write-off
- There will be further investment in aged care funding and a focus on safety and quality
Let’s talk Small Business
- Small businesses will only have to pay 25 per cent in tax
- $9.2 million over four years to establish a dedicated unit to crackdown on scam contracting
- The instant asset write-of will be increased from $25,000 to $30,000 and expanded to include businesses with a turnover of up to $50 million. The change will mean 22,000 more businesses, employing 1.7 million Australians can take advantage of this offer.
Instant asset write-off raised to $30,000
The Budget extends the instant write-off to cover assets up to $30,000, for businesses with turnovers less than $50 million — allowing a cafe to get a new fridge or grill, a tradie to buy new tools or a courier a new van.
It is the second increase in a matter of months, with the write-off already increased from $20,000 to $25,000 in January.
The Government says more than 350,000 companies have used the existing write-off and it expects about 22,000 additional businesses to now be eligible.
The expanded write-off is in effect from now until 30 June next year.
Extra incentives for apprenticeships
The current incentive payments for apprenticeships will be doubled, for fields from carpentry and plumbing to hairdressing and baking.
Employers will receive $4,000: $2,000 after the first 12 months of an apprenticeship and $2,000 at its completion. That’s on top of an existing $4,000 employer incentive.
There is also a total payment of $2,000 for the apprentices themselves — $1,000 after 12 months and $1,000 at the end of their apprenticeship.
- Commuters will benefit from a $3 billion increase to the Urban Congestion Fund, which will fund projects to cut travel times in cities and increase parking at train stations
- A 10-year infrastructure package will be drastically increased from $75 billion to $100 billion
- $2 billion will go to a fast rail from Melbourne to Geelong
- $2.2 billion for road safety, which will help councils tackle black spots and pot holes
- $100 million for regional airports
- $165 million for the Adelaide City Deal
- Congestion-busting projects for every state and territory, including $3.5 billion for Western Sydney North South Rail Link and $1.6 billion for the M1 Pacific motorway extension to Raymond Terrace in NSW and $2.6 billion for Queensland key road and transport projects
- For the first time in 12 years, Australia has a surplus. The surplus will be $7.1 billion in 2019-2020, which will grow to $17.8 billion by 2021-22.
- Net debt will be completely eliminated by 2030. It will fall from a peak of $373.5 billion in 2018-19.
- Cost of living will increase by 1 per cent to 2.5 per cent by 2020-21.
- Wage growth will be sluggish, with the Wage Price Index only increasing from 2.5 per cent this year to 3.5 per cent in 2021-22.
- The jobless rate is forecast to remain steady at 5 per cent until 2021-22.
- Tax cuts already legislated last year for middle-income earners will double, meaning 10 million workers earning up to $126,000 a year will get hip pocket relief within 13 weeks
- Single income families will get up to $1080 in their pocket annually while dual income families can expect up to $2160
- 4.5 million taxpayers will receive the full amount
- The tax bracket set to capture all taxpayers earning between $45,000 and $200,000 by 2024 will be dropped from 32.5 per cent tax rate to 30 per cent that year
- 94 per cent of workers will only pay 30c tax for every dollar they earn