The Highlights
This is a highly targeted Budget that seeks to keep change within community tolerance levels.
Most spending measures target productivity gains – although small businesses with turnover between $2m and $5m will be disappointed. Revenue measures target the asset or income rich, or just plain unpopular.
Accelerated depreciation across multiple areas:
• Micro business – immediate deductibility from Budget night for any assets purchased and used or installed and ready to use by 30 June 2017 that cost less than $20,000
• Start ups – immediate deductibility for professional expenses – cost of lawyers and accountants to get a business up and running
• Farmers – immediate deductibility for fencing and water facilities
Tax cuts for small business (under $2m) from 1 July 2015
• 1.5% company tax reduction
• 5% tax discount for unincorporated small businesses
GST on digital supplies
• Similar GST treatment applied to supplies of digital products to Australian consumers – including consulting and professional services – regardless of whether they are supplied by a local or foreign supplier
Individuals
• Changes to work related deductions for car expenses – 12% of original value and one third of actual cost methods removed and simplification of cents per kilometre method
FBT changes
• Changes to salary sacrificed meal entertainment for not for profits
• Expansion of FBT exemption for work related electronic devices provided by small businesses
Multinationals targeted
• Changes to Part IVA target around 30 global companies with revenue in excess of $1bn
Accessing government benefits
• Changes to how superannuants’ income counted for social security
• Child care shake up – Collapses three current eligibility tests with one means and activity test
• Asset test changes mean 91,000 pensioners no longer qualify and 235,000 will have pension reduced
•‘Double dipping’ Government and employer paid parental leave stopped