Budget 2016-17

The Australian Government announced its 2016-17 Budget on Tuesday, 3 May 2016.

Here’s a summary of what's been proposed for next year’s Budget for your business.

Tax changes

The following business initiatives were announced:

1. An increase to the small business tax discount – for sole traders, partnerships and other unincorporated businesses with an annual turnover of less than $5 million. The discount will increase from 5 per cent to 16 per cent over the next 10 years.

2. An increase to the small business turnover threshold – the threshold will increase from $2 million to $10 million from 1 July 2016.

3. Company tax rate decreases

(a) the company tax rate will decrease to 25% over the next 10 years, with an increase in threshold every income year.

(b) the company tax will decrease to 27.5% from 1 July 2016 for businesses with an annual turnover of less than $10 million.

4. Importing and exporting – Goods and Services Tax (GST) will be extended to low value goods imported by consumers from the 2016-2017 income year.

5. Simplifying business tax – reform of the taxation of financial arrangements (TOFA) rules after 1 January 2018.

6. Improving access to asset backed financing – remove uncertainty around the tax treatment of asset backed financing arrangements so that they are treated in the same way as other financing arrangements (e.g. loans or investments) for tax purposes.

Help for employers

A programme to help employers hire young job seekers was also announced as part of the Budget. The PaTH (Prepare-Trial-Hire) Programme includes:

1. Incentives for employers to trial youth job seekers – $1,000 up front for businesses to take on an intern. Internships can last for 4 to 12 weeks and interns will have a six week basic employability skills training.

2. Wage subsidy for employers – From 1 January 2017, employers will receive a wage subsidy of up to $10,000 paid over six months for employing people under 25 years old who have barriers to employment. Employers will receive up to $6,500 paid over six months for the most job-ready job seekers.

Help for job seekers to start a business

1. Expanding the New Enterprise Incentive Scheme (NEIS) – to support self-employment opportunities for young people.

2. Workshops – workshops to help young job seekers to explore self-employment opportunities.

3. Mentoring and support – in areas of high youth unemployment, to help people access business mentoring and resources.

4. Resources – Self-Employment and Entrepreneurship Starter Packs to raise awareness of the help available to young people who want to start a business.

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