2015 Federal Budget Announced

Last night Treasurer Joe Hockey unveiled the “Have A Go” Budget to the nation. Reducing the budget deficit, which was a prominent objective of last year’s budget, does not dominate the flavour of this Budget. Instead, this year’s Budget targets productivity gains, with small business being the overall winner in terms of the proposed changes. Below are the Budget highlights, and for further detail, please see the 2015 Federal Budget.

Accelerated depreciation

Micro business – immediate deductibility from Budget night for any assets purchased and used or installed and ready to use by 30 June 2017 that cost less than $20,000

  • Start ups – immediate deductibility for professional expenses eg: cost of lawyers and accountants to get a business up and running
  • Farmers – immediate deductibility for fencing and water facilities

Tax cuts for small business (revenue below $2m) from 1 July 2015

  • 1.5% company tax reduction. Maximum franking credit rate for dividends will remain at 30%
  • 5% tax discount for unincorporated small businesses (capped at $1000.00 for individuals per year)

 GST on digital supplies

  • Similar GST treatment applied to supplies of digital products to Australian consumers, including consulting and professional services, regardless of whether they are supplied by a local or foreign supplier

 Individuals

 Changes  to work related deductions;  For car expenses – 12% of original value and one third of actual cost methods removed and simplification of cents per kilometre method

 FBT changes

  • Changes to salary sacrificed meal entertainment for not-for-profits
  • Expansion of FBT exemption for work related electronic devices provided by small businesses 

Multinationals targeted 

  • Changes to Part IVA target around 30 global companies with revenue in excess of $1bn

 Accessing government benefits

  • Changes to how superannuants’ income is counted for social security
  • Child care shake up – Collapses three current eligibility tests with one means and activity test
  • Asset test changes mean 91,000 pensioners no longer qualify and 235,000 will have pension reduced
  • ‘Double dipping’ Government and employer paid parental leave stopped
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