The Treasurer Joe Hockey handed down the federal budget on the 12th May and stated, "Our future growth will come from growing a small business into big business." Small business was front and center in this budget and according to the Treasurer the budget "empowers small business to invest, grow and create jobs."

moneyaustraliaHockey 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 a 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 they propose a range of small business concessions but virtually all 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 who are significant employers and major taxpayers were excluded from these concessions.

This newsletter contains our budget analysis and feels free to contact us to discuss the concessions and how your business can capitalize 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 businesses with a turnover of under $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
  • A 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 extra $265.5 million for the Australian Tax Office to crack down on GST fraud

The budget also announces

  • Changes to aged pension eligibility tests
  • Allocation of $3.5 billion to childcare
  • Cuts to paid parental leave for those parents who also receive parental leave from their employer
  • A Youth Transition to Work program for community workers
  • Foreign businesses supplying digital products and services subject to GS

ECONOMIC OUTLOOK

The 2015/16 Federal Budget delivered by the Treasurer 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

For quarterly BAS, generally the 28th day after the quarter-end. However, if you lodge through us you are automatically given a 2-week extension. Monthly BAS...

For our clients, tax returns are due March/April/May of the following year. For example, the deadline for 08/09 returns would be March/April/May 2010.

For quarterly payments: to get a tax deduction and no penalty the due date is the 28th day following the previous quarter-end.

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