2015/16 Budget Overview
On the 12th May, Treasurer Joe Hockey handed down the federal budget, stating “Our future growth will come from growing small business into big business.” Small business was front and centre in this budget and according to the Treasurer the budget “empowers small business to invest, grow and create jobs.”
As Mr. Hockey stated, “Small businesses are the engine room of our economy. In 2013/14 there were over 280,000 new small businesses started in Australia. 96% of all Australia’s businesses are small business, employing over 4.5 million people and producing over $330 billion of nation’s total economic output.”
The 2015/16 budget has placed responsibility for the growth of the economy firmly on the shoulders of small business. The government claims this is "the biggest small business initiative in our nation’s history" and have proposed a range of small business concessions. The majority of the stimulus and incentives are for small businesses with an aggregated turnover of less than $2 million per annum. The 72,000 businesses in Australia with a turnover of between $2 million and $5 million were excluded from these concessions.
Please contact us at Hyde Cooper Wells to discuss the concessions and how your business can capitalise on the opportunities.
The key budget measures that will impact small business are:
- Cut the company tax rate from 30% to 28.5% for incorporated entities with a turnover of less than $2m
- A tax ‘discount’ of 5% for unincorporated businesses, capped at $1000
- Provide an immediate tax deduction for individual assets costing less than $20,000
- Expanded Fringe Benefits Tax exemption for work-related portable electronic devices
- Expanded Capital Gains Tax rollover relief when businesses change legal structures
- Expanded tax concessions for employee share schemes
- Streamlined business registration process
- Removing obstacles to crowdsourced equity funding
- Provide $330 million for training programs to support young people to becoming job-ready
- $1.2 billion in subsidies for employers that hire specific groups of job seekers including workers aged 50+
- An additional $265.5 million for the ATO to clamp down on GST fraud.
The budget also announced:
- Changes to aged pension eligibility tests
- Allocation of $3.5 billion to childcare
- Cuts to paid parental leave for those who receive parental leave from their employer in addition to the government payment
- Youth Transition to Work program for community workers
- Foreign businesses supplying digital products and services subject to GST
The 2015/16 Federal Budget forecasts a deficit of $35.1B, an improvement of $6B from this year’s estimated position. This represents 2.1 percent of GDP and there is no expectation of significantly improved financial performance in the next year. The government forecasts unemployment to rise to 6.5 percent from the April 2015 rate of 6.1 percent. CPI is projected to be 2.5 percent with similar wage growth expectations. Beyond the immediate 12 month period the government is looking to reduce the budget deficit to $6.9b by 2018/19.
Click HERE to download the full edition of The Business Accelerator Magazine for June 2015.
Other articles in this edition:
- 2015 Individual Tax Return Checklist
- 2015 Companies, Partnerships, Trusts & Other Business Tax Checklist
- Small Business Measures 2015
- Personal Taxation 2015
- Other Budget Measures 2015
- FBT Changes 2015
- Keeping Track Of Your Business Growth
- Tech Corner... Video Chat Tools
- ATO Issues Scam Warning
- ATO Data Matching Targets