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2015 Federal Budget

2015 Federal Budget (Last Updated On: May 28, 2015)

Small businesses are a big winner in the 2015-2016 Federal budget. The Federal Government has focused on turbocharging the economy and getting more Australians into work, through generous tax concessions for small businesses and changes to childcare subsidies.

Big ticket items for small businesses are:

–   Small business companies: get a 1.5 per cent tax rate cut from 30% to 28.5%;

–  other small businesses: for the approximate 1.7 million sole traders, partnerships and other unincorporated small businesses (not run through companies), the budget provides a 5% tax discount of up to $1,000;

–  tax breaks on business equipment: until 30 June 2017 business equipment costing less than $20,000 will be 100% tax deductible for small businesses. This can apply to as many items as you like – tables, computers, coffee machines, solar panels and air-conditioning. Any assets over $20,000 can be pooled together and depreciated at an accelerated rate;

–  employee shares: tax concessions are being expanded on Employee Share Schemes to assist start-up businesses;

–  subsidies for mature workers and young people: to encourage greater participation of over 50s in the workforce, businesses may be able to access a wage subsidy of up to $10,000 over 12 months (reduced from 24 months) in relation to new employees who are over 50 and who have been unemployed for more than six months. From October 2015, young workers fresh out of school or university will be able to undertake four weeks’ of unpaid work experience and employers who subsequently offer then jobs will be able to access wage subsidies of up to $6,500 over the first 12 months of employment.

There were also a couple of losers in the budget, with increased tax rates (and no tax free threshold) for foreign workers on working holiday visas and a reduction in the fringe benefit tax exemption cap for the not-for-profit sector in 2016.

In a remarkable change of policy, the Government also wants to prevent what it calls ‘double dipping’ on parental leave. From 1 July 2016 parents will also no longer be able to claim both employer-funded paid parental leave schemes and the taxpayer-funded government 18-week paid parental leave.

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