Tuesday, June 18, 2024

Federal Government releases 2016 budget

The Government forecasts the budget deficit to narrow from 2.4 per cent ($39.9 billion) of GDP in 2015/16 to just 0.3 per cent of GDP in 2019/20. Revenues are projected to increase by 1.6 per cent of GDP over the four years to 2019/20, and, over the same period, expenses are forecast to fall 0.6 per cent of GDP. For the coming financial year the deficit is forecast at $37.1 billion or 2.2 per cent of GDP.

Key features of the budget relating to retailers include:

  • Businesses with a turnover up to $10 million will pay a reduced company tax rate of 27.5 per cent.
  • Companies with turnover of up to $100 million will pay a 27.5 per cent rate by 2020.
  • All businesses to receive a reduced company tax rate of 27.5 per cent by 2024 and 25 per cent by 2027.
  • A tax discount of eight per cent for unincorporated small businesses with a turnover of less than $5 million.
  • A $20,000 instant asset write-off for businesses with a turnover up to $10 million, which expires in June 2017.
  • The turnover threshold for small businesses to be increased from $2 million to $10 million, providing tax concessions for around 90,000 businesses.
  • A $750 million employment package will offer businesses incentives for engaging with internship and training programs for the young unemployed.
  • Four 12.5 per cent hikes in the tobacco excise over four years.
  • Multinational corporations to face a 40 per cent ‘Google Tax’ on income they attempt to shift offshore, to be enforced by an ATO taskforce of 1,000.
  • An additional $33 billion over the forward estimates to deliver road and rail upgrades, including $594 million to Australian Rail Track Corporation for the proposed Melbourne/Brisbane rail link.
  • Overseas suppliers that have an Australian turnover of $75,000 or more will be required to register for GST to collect and remit the GST for low-value goods being supplied to Australian consumers.

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