The 2018 Federal Budget was in Tax and fiscal terms was a generally a lacklustre affair. Herein is a business perspective synopsis.
Company Tax Rates: No changes excepting as previously announced
Personal income tax cuts: A seven-year plan to abolish the 37 per cent tax bracket to tackle bracket creep.
GST: As expected, there is no change to the rate of the GST. However, the tax will be extended to Australian hotel bookings made through offshore websites.
BAS Red tape: Government stated that the Current streamlining of GST reporting have delivered an average $590 annual cost saving to SMEs by reducing the number of BAS GST questions to three from 20.
Staff Training: $250 million added to the Skilling Australians Fund, which supports vocational education and training to upskill Australian workers.
Small Business write off: $20,000 instant asset write-off is extended for another year to last until 1 July 2019.
Black economy and tax evasion: Many measures were introduced:
- An economy wide cash payment limit for cash transactions of $10,000 plus will be introduced.
- The Government’s procurement procedures will be changed to incentivise tax compliance in supply chains,
- Plans for a new identification systems for company directors (DINs) will continue to be progressed.
- The taxable payments reporting system will be expanded to contractors in industries with higher identified risks of not reporting their income.
R&D and other Research grants and funding: A number of grants and funding boosts were announced
- $20 million in SME Export Hubs, to foster greater collaboration between businesses and identify new export opportunities.
- Additional funding for the fintech sector (amount unspecified).
- $140 million for the Australian film industry.
- Funding to support farmers and primary producers, in the form of $51.3 million to expand the existing network of agricultural trade counsellors in high-growth export markets; $6.3 million to access agricultural and veterinary chemicals; and $4.7 million to improve collection of agricultural labour force data to boost efficiencies.
- $200 billion investment in defence over the next 10 years,
- A new Sovereign Industrial Capability Grants Program worth up to $17 million annually to help SMEs in the defence sector buy essential equipment
Infrastructure: Infrastructure spending was targeted primarily on transport and scientific projects
- $2.4 billion will be invested in public technology infrastructure.
- $24.5 billion invest in new “nationally significant” transport projects
- $200 million for a third round of the Building Better Regions Fund to support regional infrastructure.
Scott Morrison Federal Treasurer: Closing summary – Mr Morrison said that the Budget deficit would be $18.2 billion in 2017-18, and $14.5 billion in 2018-19. He added that the Budget is forecast to return to a modest balance of $2.2 billion in 2019-20 and increase to projected surpluses of $11.0 billion in 2020-21 and $16.6 billion in 2021-22.