Are you aware of the changes to concessional contributions as of this financial year? Altitude Advisory’s Edward Allan discusses all you need to... Read more
The 2018 Budget has thrown up some surprising wins for South Australian businesses, but not everyone will be happy with Scott Morrison’s plans.
This year’s Federal Budget – Mr Morrison’s third as Treasurer – has been feverishly anticipated, given the level of speculation on the run-up to last night’s announcement.
The good news for businesses across the board is the promise of “extended instant tax deductions” in keeping with the Government’s 10-year plan to reduce company taxes from 30 to 25 per cent.
The downside is that with lower taxes, comes tighter tax rules and tougher enforcement for some.
Addressing Parliament in his Budget speech, Mr Morrison said: “Taxes should be lower, simpler and fairer, but taxes must also be paid.
“Honest and fair businesses and taxpayers are being ripped off by those who think they are above paying tax.”
Altitude Advisory Partner Kristen Buik says there are some benefits for business owners to come out of this Budget.
“With a focus on personal tax rates, superannuation tweaks and some improved business concessions, the Budget won’t all be bad news for business owners,” said Kristen.
“Low to middle income tax earners stand to benefit immediately, albeit in a small win. The same bracket will also benefit from fairer rules around low super balances that have previously been chewed up by fees.
“For those running small businesses, the instant asset tax write has been extended for another year. The 27.5 per cent company tax rate for small companies has also increased to cover revenues of less than $50 million.
“The Government, in its wisdom, has also created a Black Economy Taskforce in a bid to kill the cash economy, outlawing cash payments of greater than $10,000 for goods and services which, no doubt, will impact no one who is running a legitimate business.”
In a definite win for small businesses, the budget extended a tax break for small business owners to immediately deduct spending on eligible assets of up to $20,000. Also, the streamlining of GST reporting for around 2.7 million small businesses is expected to save them an average of $590 each per year.
The Budget also outlined plans for rewarding businesses who invest in new technology and equipment. However, there will be a pullback in the level of funding for new research and development projects.
Businesses will also be required to report to the ATO payments to security providers, road freight transporters and computer system design and services, in addition to the previously announced requirement to report payments to cleaning and courier contractors, and the existing requirement to report payments to building contractors.
The Government expects to raise nearly $550 million in extra revenue from this measure.
Despite much talk about big infrastructure spend, there was little for construction firms to cheer about in the 2018 Budget.
Infrastructure Partnerships Australia’s chief executive Adrian Dwyer said it was “concerning” that the budget “cut real infrastructure funding by $2 billion over the forward estimates”.
Australia’s burgeoning craft beer industry will be raising a toast to Morrison today after he announced a cut to the tax rate for beer sold in smaller kegs.
The industry has lobbied Government for years, claiming that they are at a disadvantage against large multinational brewers.
Furthermore, all brewers and distillers will benefit from an increase in the refund they can claim on the excise they pay, from $30,000 to $100,000.
Gloria Rowett, Marion Holiday Park
Phillip Cross, Royce Cross Agencies