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Budget 2016: Overview

The 2016-17 Federal Budget is a budget of targets – broad targets to boost business and innovation, and the narrow revenue targets of the wealthy and multi-nationals.  It’s a big, long-term crafted budget designed to give enough pre-election glow but with structural measures to reign in spending and reduce concessions.

At one end, the Budget contains broad measure to bolster business, investment and innovation including tax cuts and a number of tax measures enabling and freeing up alternate funding and investment sources for business.

At the other end are significant reforms restricting access to superannuation concessions as well as a stronger crackdown on multinationals diverting profits outside Australia.

To police the new revenue measures, the ATO gets an extra $678.9 million to establish a new Tax Avoidance Taskforce.

Plus, the Budget allows for a $1.6 billion “decisions taken but not yet announced” election war chest.

Business

  • Company tax rate reduced to 25% over 10 years
  • Increase in tax discount for unincorporated small business to 16% over 10 years
  • Small business entity threshold increase to $10m from 1 July 2016
  • $1K GST exemption on imported goods abolished from 1 July 2017
  • UK style diverted profits tax to reign in multinationals

Superannuation

  • $500,000 lifetime non-concessional contributions cap from Budget night
  • Reduction in concessional contribution cap from 1 July 2017
  • Tax exemption on earnings supporting transition to retirement income streams (TRIS) removed from 1 July 2017
  • 30% tax on super contributions of high income earners extended
  • Tax free super balances capped at $1.6m from 1 July 2017

Individuals & Families

  • 5% personal income tax threshold increase to $87,000 from 1 July 2016
  • Subsidies to create employment path for unemployment youth

Other Announcements

  • $678.9m ATO anti-avoidance taskforce
  • Tobacco excise adds $4.7bn

SOURCE: Knowledge Shop

To discuss how this may impact your circumstances please contact PPT on (03) 5331 3711.

DISCLAIMER: The material and contents provided in this publication are informative in nature only.  It is not intended to be advice and you should not act specifically on the basis of this information alone.  If expert assistance is required, professional advice should be obtained.

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