2016-17 Federal Budget Overview
Last week, we dedicated our Communique to the main features of the Victorian State Budget handed down by the Treasurer of Victoria, Tim Pallas.
This week, we provide members with a similar wrap up of the Federal Budget handed down by the Federal Treasurer Scott Morrison on 2 May.
The 2016-17 Federal Budget aims to be a fiscally responsible budget designed to deliver growth and jobs with tax cuts to address bracket creep for a substantial part of the Australian population.
Claiming a continued path to a balanced economy, the Budget cautiously forecasts a deficit for 2016-17 of $37.1 billion to match the Government’s projection of steady, but modest growth of the Australian economy. While lower company tax rates are a further shot in the arm for small and medium-sized business, benefits to business overall are for the longer term.
Multinational businesses are to face tougher rules by the Australian Tax Office to combat tax avoidance. Changes to superannuation will impact on well-off retirees through a $1.6 million cap on amounts that can be transferred into tax-free retirement accounts.
The Budget offers only a relatively modest effort to support business start-up opportunities, which seems surprising for a government professing to support innovation and entrepreneurship to help underpin a vibrant new economy. Such incentives should be a feature of future budgets.
A summary of key highlights from the 2016-17 Federal Budget, addressing issues most relevant to the Committee for Melbourne’s agenda can be found HERE.