With the Federal Budget 2016-17 announced, small businesses and middle income earners get the handouts, with promises to promote jobs and growth, control spending and make savings.
We have summarised some of the key areas that could affect you as an individual, a contractor and a business.
|
Company Tax
- Small businesses tax rate reduced to 27.5%, starting with businesses with a turnover less than $10 million on 1 July 2016.
- Long term plan to reduce the company tax rate to 25% by 2026-27.
- The Government will tackle multinational companies’ tax avoidance by establishing a new Tax Avoidance Taskforce
- The Government will build on existing measures by introducing a new Diverted Profits Tax to impose a 40% penalty rate of tax on large multinationals that attempt to shift their Australian profits offshore to avoid paying tax
|
|
Education
- $1.2bn Funding between 2018 – 2020 for Government and Non-Government Schools.
- Providing additional funding of $118m for schools with students with disabilities
|
|
Health
- $1.2bn of efficiencies to be made through changes to payments to aged care providers.
- Total expenditure on health, aged care and sport to increase by 4.1% in 2016-2017
- Savings of $925m as a result of pausing indexation of Medicare Scheduled fees
|
|
Individual Tax
- Middle income tax bracket change, the 37% tax bracket which currently kicks in at $80,000 will now start at $87,000.
|
|
Superannuation
- Expect to see big changes from 1 July 2017 affecting high income earners and those with large super balances
- The Annual $180,000 cap to be replaced by $500,000 lifetime cap (indexed to average weekly ordinary time earnings, or AWOTE) from 3 May 2016.
- Work test will be removed from 1 July 2017, meaning contribution caps to be the only restriction up to age 75.
- Concessional contribution cap of $25,000 from 1 July 2017 (currently 30,000 or 35,000 for those aged 50 and over).
- The extra tax rate of 30% that applies to contributions by those with incomes of over $300,000 will now apply to those with income of more than $250,000.
|
It’s clear to say that big businesses and those with wealthy superannuation accounts will suffer the most with the announced budget.
The information provided is a general summary of the budget, for any specific advice or concerns that you may have please call Raj Sesha on 02 9299 2233 or click here
Leave a Reply
Want to join the discussion?Feel free to contribute!