The 2018 Commonwealth Budget continues to deliver wins for business.
The big wins in the 2018 Commonwealth Budget for small business came in the form of extensions or continuations from previous budgets and indirect investment.
The Government has legislated tax cuts for around 3.3 million small and medium Australian businesses employing 6.8 million workers with annual turnover up to $50 million, as part of the Ten Year Enterprise Tax Plan.
The Plan has also increased the unincorporated small business tax discount rate from 5 per cent to 8 per cent (up to a cap of $1,000). This rate will increase to 16 per cent by 2026-27. By lifting the small business entity turnover threshold from $2 million to $10 million, access has also been extended to a range of small business tax concessions.
These tax cuts began in 2016-17. Companies with annual turnover less than $10 million had their tax rate cut to 27.5 per cent – the lowest level in over 50 years. This lower corporate tax rate was extended to companies with annual turnover less than $25 million in 2017-18 and will extend to companies with annual turnover less than $50 million from 1 July 2018.
In addition, the 2015-16 budget measure Growing Jobs and Small Business - has been extended another year. This measure allows small businesses with turnover up to $10 million to make an immediate write-off of assets up to $20,000, improving cash flow for small businesses and providing a boost to small business activity and investment.
Both of these measures continue to be signs of the Government’s support of economic growth and encouraging small business.
Tax cuts to low and middle income earners aimed at encouraging and rewarding working Australians and assist with cost of living pressures will benefit businesses by putting spending money back in pockets. The immediate benefit for low and middle income earners will be a tax cut up to $530 a year and up to $1,060 for a working couple, starting in 2018‒19.
Investment in technology is another focus of this year’s budget that will have a flow on effect to business. $2.4 billion will go towards public technology infrastructure. This includes supercomputers, world class satellite imagery, more accurate GPS and a national space agency. Building capabilities in science and technology ensures that Australians and Australian businesses are not left behind.
The Government is driving economic growth by legislating tax cuts for all businesses, prioritising small to medium businesses, delivering infrastructure that supports industries and jobs, and targeting incentives to promote research, development and new technology. This will make Victoria's businesses more competitive so they can grow and hire more Australians.