The Government has taken a two-prong approach in this year’s Federal Budget to stimulate growth in the economy by providing targeted spending and business incentives.
A key feature of this year’s Budget is the commitment to investing in regional growth to better the Australian economy. A $472 million Regional Growth Fund will be set up to invest in regional infrastructure projects.
An additional $8.4 billion will be allocated to fund the Melbourne-to-Brisbane Inland Rail in 2017-18. Inland Rail will provide significant employment in regional areas as well as increased export opportunities.
Company tax plan
The Government’s promise to small and medium businesses in last year’s Budget continues through its Ten Year Enterprise Tax Plan to reduce the company tax rate for all companies to 25 per cent by 2026-27.
Incorporated small businesses with a turnover less than $10 million will have their tax rate reduced to 27.5 per cent in 2016-17. Once legislated, the tax cut will be passed on to companies with an annual turnover less than $50 million by 2018-19.
A lower corporate tax rate will help permanently broaden the economy by just over one per cent in the long term and effectively promote business investment by raising the investment return in Australia.
The Government acknowledges the major role small businesses play in the Australian economy and is committed to supporting small businesses to continue to grow and flourish.
Instant asset write-off
A further boost will be provided for small businesses as the Government is extending the $20,000 instant asset write-off for a further 12 months until 30 June 2018. Small businesses with an aggregate annual turnover less than $10 million can access the concession to help improve their cash flow and invest in the assets they need to grow.
Reducing red tape
The Government will provide $300 million over two years to states to help reduce the red tape for small businesses. The removal of unnecessary restrictions for small businesses will help level the playing field and lessen regulatory burden.