This year’s budget has hit us with a few new items, but nothing that’s going to be a game changer. We know you’re already looking at an inbox full of budget reports, deep analyses and endless think pieces, and we’re not about to make that worse for you.
What we’ve put together is the top 5 points that you need to know from the budget. We’ll keep it short, sharp, and focused. Let’s get started.
The big one: superannuation changes
There’s some news on the superannuation front. The areas to note are the lifetime capping of non-concessional contributions to your super fund at $500k. Where previously, your contributions were broadly allowed up to $180k p.a. in an uncapped lump sum, the new changes will limit that severely. These changes will take effect immediately.
From July 1st 2017, there will be an annual $25k limit placed on concessional contributions, as well as a new limit of $1.6m placed on transfers to pension retirement phase.
An additional 15% tax will be placed on concessional super contributions for those who are earning above $250k.
These changes are a multi-party policy, born from the ALP and implemented by the Liberal party – meaning that there is no guarantee more drastic changes won’t be coming in the future. Because of that, we’re anticipating a shift in the way people view their retirement planning. If there are continuing changes, it’s difficult to rely on it.
Other changes are smaller, but notable:
Youth Jobs initiative
The government is planning on implementing a new employment program, encouraging and training young Aussies for new roles. The great news for businesses is that there will be subsidies for employing program participants.
The PaTH program could be a great help to companies who are looking at expanding their workforce and investing in young employees.
Overseas businesses paying GST
This is a great bonus for Australian companies looking to compete with overseas enterprises. Homegrown retailers and businesses have been on an uneven playing field when competing with foreign companies, as they weren’t paying the GST.
This change has offered Australian industries a fairer deal in terms of their pricing and competitiveness.
A crackdown on taxes for overseas companies
In a win for the government and for Australian consumers, the overseas companies such as Google, Apple and Amazon who have previously limited their tax liabilities in Australia will no longer be easily able to do so.
While this won’t affect your business, it’s certainly notable as it’s another indicator of the way overseas companies could be constrained more to allow for Australian competition.
Tax changes for small businesses
The tax rate for small businesses is being cut to 27.5 %, with a small business now defined as turning over less than $10 million. This is going to be a positive for many Australian entrepreneurs and business owners, who can take advantage of lower tax rates with a wider scope than were supported last year.
The budget is always a tough one for business owners and investors, trying to gauge the way it could impact their bottom line and their long term plans. This year, we don’t see too many earth moving changes, and it’s not going to be a budget that will drastically shift your operations.