Earlier this week the government delivered the 2015 Federal Budget explaining that the focus of this year’s budget is to stimulate growth and create jobs and opportunity.
Small Business Owners
Small business owners are the major winner in this year’s budget.
If you are a small business owner, and your business has an aggregated annual turnover of under $2 million, you will benefit from the following:
- A proposed tax rate reduction from 30% to 28.5%;
- Immediate tax deductions for assets under $20,000;
- The ability to change the company’s legal structure without attracting a CGT liability;
- A Fringe Benefits Tax (FBT) exemption if your company provides employees with more than one qualifying work-related portable electronic device; and,
- Immediate deductibility for business establishment costs.
Working Parents and Young Children
- Working parents earning between $65-170K will benefit as the government resolved to simplify childcare subsidies; and,
- Pre-schoolers, and their parents, will benefit from $843 million being allocated to preschool programs during 2016 and 2017.
Young and Unemployed
- Young and unemployed will only have to wait four weeks, as opposed to the originally proposed six months, to access the dole; and,
- Individuals between 22 and 24 will benefit from higher Newstart allowance payments up until July 2016.
Temporary Ill people and Terminally Ill People
- The government will be paying generic drug manufacturers less, which is expected to lead to a price reduction for consumers buying over-the counter medications; and,
- Terminally ill people, satisfying certain criteria, will be granted unrestricted and tax-free access to their superannuation fund.
Drought Affected Farmers
- Farmers will benefit from $300 million being allocated to them in drought assistance; and,
- An immediate tax deduction on any investment in water facilities and new fencing.
Defence and Military
- Military operations in Afghanistan, Iraq and the Middle East will receive an additional $750 million to assist in efforts against terrorism; and,
- $403 million, over four years, will be put towards helping fight the Islamic State.
As with every Federal Budget, some people feel the hardship of the government’s attempts to return to surplus.
Stay at Home Parents and Expecting Parents
- The government is removing childcare subsidies for stay at home parents with a household income over $65,000. Expectant mothers will no longer be able to “double dip” and claim the government’s paid parental leave scheme as well as their employer paid parental leave scheme.
- FIFO workers currently benefit from a generous tax break which helps people living in remote areas. The government has planned to amend the Zone Tax Offset to no longer include the 20% of people claiming the offset but not living in remote areas full-time. From July 1 2015 FIFO workers will lose out on the tax break; this is expected to save the government around $325 million.
- As widely anticipated following Australia’s recent tense relations with Indonesia, Indonesia’s foreign aid will be slashed by 40%;
- Africa will also see a huge reduction in their foreign aid which will be slashed by a huge 70%; and,
- The Refugee Council of Australia will lose out on their funding of $140,000.
- The thresholds for assets tests for the pension will be amended in a move to benefit those at the lower end of the pension. Singles over the age of 65 will now only be able to claim the part pension if their assets (excluding the family home) total less than $550,000. The threshold was previously $775,000. It is expected that this move will make 81,000 pensioners claiming the pension no longer qualify.
- In a move to shrink the size of the government bodies, $244 million is expected to be saved over cuts to health departments, cuts to education departments and the removal of 35 government bodies.
Fraudulent Welfare Claimers
- The Department of Human Services will receive around $1.5 billion over four years to acquire better resources to detect and prevent welfare fraud and non-compliance.
- People visiting Australia from other countries on working holiday visas will no longer benefit from a tax free threshold. Previously backpackers were able to enjoy the same $18,000 cash free threshold as everyone else, but not anymore.
Australians with HELP Debts Working Overseas
- From July 2017 anyone working overseas with a HELP debt will still be required to make payments on their loan. They will subject to the same obligations as people residing in Australia when it comes to paying back their debt.
People who are Against Vaccinations
- From 1 January 2016 the government will implement a new “No Jab, No Pay” policy. Families refusing to vaccinate their children will lose access to any childcare benefits and the Family Tax Benefit. These new rules are expected to save the government around $500 million over the next five years.
For more information on the Federal Budget you can visit the government website - http://www.budget.gov.au
If you want to know more, or require any assistance with financial matters, please do not hesitate to contact us on 1300 663 943. We will be more than happy to help.