2017 - 2018 Federal Budget
Treasurer Scott Morrison's second Budget projects a 10th straight year of deficit, with two more shortfalls to follow before the projected move back into the black.
There were tax rises announced last night as well as new saving measures, including another crackdown on welfare compliance. There is also the shift of some capital expenditure off Budget, a clever manoeuvre that has allowed the government to maintain recurrent spending as a share of the economy. The budget also includes significant changes for the banking sector, with a new big-bank tax, and director and executive oversight by the Australian Prudential Regulation Authority (APRA).
MPAQ have put together some of the important points that will affect our members including what's in the budget for:
- Amending the small business capital gains tax concessions to ensure that the concessions can only be accessed in relation to assets used in a small business or ownership interests in a small business.
- Through the National Partnership on Regulatory Reform, the government will provide up to $300 million over two years to states and territories that reduce red tape for small business.
- Extension of the small business instant asset write-off scheme allowing businesses with turnover up to $10 million to immediately write off expenditure up to $20,000 for a further year (originally due to finish on June 30, 2017).
- Replace current requirements on businesses employing foreign workers with an annual foreign worker levy of $1,200 or $1,800 per worker per year on a temporary work visa and a $3,000 or $5,000 one-off levy for those on a permanent skilled visa. This levy will raise $1.2 billion over four years which will go to the Commonwealth-State Skilling Australians Fund. States and territories will be able to access this fund when delivering on commitments to train new apprentices.
- Confirmation of the government's intention to reduce corporate tax rate to 25 per cent for all businesses.
- Increase the maximum financial penalties under the Australian Consumer Law by aligning consumer penalties with the competition provisions of the Competition and Consumer Act 2010 from 1 July 2018.
- $24 million investment in Rural and Regional Enterprise scholarships.
- $75 billion in infrastructure funding and financing over the next decade, with this budget expanding the use of equity and debt financing to fund infrastructure projects.
- $8.4 billion in equity to be provided to the Australian Rail Track Corporation for the Melbourne to Brisbane Inland Rail Project.
- Infrastructure funding also includes: $844 million for the Bruce Highway, $1.6 billion in infrastructure funding for Western Australia, and $1 billion to be made available for Victoria regional rail and other infrastructure projects.
- Establishment of a $472 million Regional Growth Fund including $200 million in funding to support a further round of the Building Better Regions programme.
- The federal government will establish a new Infrastructure and Projects Financing Agency to help assess infrastructure project choices, recruiting people with commercial experience
- Provision of $28.5 million to establish the Regional Investment Corporation to streamline delivery of $4 billion in concessional loans.
- First-home buyers will be allowed to salary-sacrifice contributions for a home deposit from pre-tax pay into the First Home Super Savers Scheme, using their existing superannuation account and attracting the same tax advantages of superannuation. Contributions will be limited to $30,000 per person and $15,000 per year.
- Establish a $1 billion National Housing Infrastructure Facility to fund 'micro' city deals, removing infrastructure impediments to developing new homes.
- From July 1 2018, establish a new National Housing Finance and Investment Corporation to provide long-term, low-cost finance to support more affordable rental housing.
- Increasing CGT discount to 60 per cent for investments in affordable housing.
- Further roll-out of government's City Deals between all levels of government and the private sector to develop urban areas.
- Those over the age of 65 who downsize will be able to make a non-concessional superannuation contribution of up to $300,000 on the sale of their principal home.
- Annual foreign investment levy of $5,000 on all future foreign investors who leave their properties vacant for at least 6 months per year. Removal of main residence capital gains tax exemption for foreign investors.
- Restore requirements preventing developers from selling more than 50 per cent of new developments to foreign investors.
We will keep members up to date as more information comes to hand.