Lawbase Budget Snapshot for 2017
The Federal Budget has been handed down for 2017 and there’s mainly good news for Australia’s small to medium businesses. This sector is often referred to as the backbone of Australia’s economy and is a huge source of GDP, tax revenue and employment. Small to medium businesses will benefit from extensions to initiatives announced last year, and some new ones designed to boost growth and investment in the sector.
Here’s the low down.
An extension of the immediate tax deduction for assets costing up to $20,000, until June 30, 2018 for businesses with an annual turnover up to $10 million. Great for purchases of vehicles, equipment and technology.
Further to last year’s reduction of the company tax rate to 27.5%, there is a commitment to lower it to 25% for all businesses by 2026-27. This is heading in the right direction to increase investment, wages and jobs growth.
While you won’t see the impact of the following initiatives in the cash register or balance sheet immediately, they address issues that impact all businesses in Australia, and provide some great opportunities on the back of Government investment.
Red tape is one of the biggest issues facing business owners and the establishment of the National Partnership on Regulatory Reform will provide $300 million over two years to the States to reduce unnecessary restrictions.
The Skilling Australians Fund provides $1.5 billion over four years to the States for training, focused on apprenticeships and traineeships.
A massive investment in infrastructure with $75 billion committed over 10 years to fund road, rail, ports and power projects. The flow on effects for businesses in these sectors (such as construction and related services), and located in and around where projects are being undertaken (such as Sydney’s Badgerys Creek for the Western Sydney Airport) will be significant.
More focus on curtailing the black (or cash) economy including banning technology that allows businesses to falsify sales information to avoid paying tax. The beneficiaries of this measure will be legitimate businesses that are currently at a disadvantage competing with those operating in the cash economy.
The cost and availability of reliable electricity and gas is an on-going focus for the Federal Government and initiatives such as the new Snowy Mountains Scheme will help address this significant issue for businesses.
Business confidence levels before this week’s Budget were at a seven-year high, and we expect the announcements in the 2017 Budget to continue this momentum for Australia’s small and medium businesses.
Please contact us should you wish to discuss the above.