The Federal Government budget 2016-2017 Winners and Losers.
Small Business
The Federal Government budget 2016-2017 will back small businesses by reducing their tax rate to 27.5%, the threshold for businesses eligible for this will rise from $2 million in annual turnover to $10 million. This will affect about 870,000 businesses and about 3.4 million workers.
Further the Government will decrease the tax rate for all companies to 25 per cent by 2026-27.
Since many small businesses are not incorporated (companies), the Government will increase the tax discount to 8 per cent on 1Â July 2016, up to a maximum value of $1,000 for unincorporated businesses with annual turnover of less than $5 million. After the initial increase, the discount will be increased in phases to a final rate of 16 per cent in 2026-27.
Average full-time earners
The 2016-2017 year budget will prevent average full time wage earners from moving into the second top tax bracket until 2019-20 by increasing the 32.5 per cent tax threshold from $80,000 to $87,000. The government believes this will stop around 500,000 taxpayers facing the 37 per cent marginal tax rate.
Young Job Seekers
The Governments’ new initiative on 2016-2017 year budget, the Youth Jobs Path program, will provide $751.7 million over the next four years to get people under 25 and currently on employment benefits trained to be job ready and enter the workforce.
Youth Jobs PaTH
From the beginning of next financial year, young job seekers, who are actively looking to boost their job-readiness, will participate in intensive pre-employment skills training within five months of registering with jobactive.
In stage two, there will be an internship programme with up to 120,000 placements over four years. This will help young job seekers who have been in employment services for six months or more to gain valuable work experience within a real business.
And each intern will work 15 to 25 hours per week and receive $200 a fortnight on top of their regular welfare benefits. Prospective interns will need to have been looking for a job for at least six months.
Infrastructure
An amount of 50 billion dollars is being delivered for the period 2013-14 to 2019-20 for road and rail infrastructure across the country.
Victoria will get almost $ 3 billion on new infrastructure projects. Mainly for The state’s Western Ring Road $350 million, Monash Freeway $500 million, regional highways $345 million and $75 million to combat congestion in urban areas.
Queensland will get nearly $200 million for upgrades to the Ipswich Motorway in the state’s south-east.
Working Parents
The Government has held off implementing the childcare subsidies, which were a major sweetener in last year’s budget.
Smokers
The price of cigarettes will rise along with tightening limits on what can be brought into the country duty-free.
The country’s 2.5 million smokers will be hit once again, with four annual rises of 12.5 per cent in the tobacco excise. Almost 70 per cent of the cost of cigarettes will contribute to government excise by 2020.
Farmers and tourism operators
Despite the heavy criticism, the Budget did not announce any changes concerning the proposed backpacker tax. Government will change the residency rules and remove the tax-free threshold for overseas working holidaymakers in Australia. The changes are proposed to apply from 1 July 2016 and, awaiting any direct announcement by the Government.
High income earners
From July 2017 the income threshold above which the additional 15% Division 293 tax cuts for superannuation concessional contributions will be reduced from $300,000 to $250,000.
The 30% of contributions tax rate will now be imposed on individual earning $250,000 a year down from $300,000.
Also the government will reduce the annual concessional contributions cap to $25,000 a year.
