2015 2016 Federal Budget Summary
June 2nd, 2015
The 2015-16 Federal Budget has its eye on turbo charging the economy and getting more Australians into work, with generous stimulus for small business and childcare. With sweeping changes to young people, parents, businesses, consumers and job seekers, here’s how the Budget will affect your hip pocket.
IF YOU’RE LOOKING FOR A JOB …
If you’re fresh out of school or university and hope to join the workforce, new government initiatives are designed to make you a more attractive employee. To encourage businesses to employ young people, employers can access up to $6500 in wage subsidies over 12 months. And job seekers can receive a $10-a-week boost to their unemployment benefits if they complete volunteer work experience of up to 25 hours per week. Last year’s plan to make people under 30 wait six months to receive the dole has been scrapped, replaced with a four-week waiting period for those under 25.
IF YOU RUN A SMALL BUSINESS …
Small business is the big winner of Joe Hockey’s second budget. The government has slashed red tape while offering generous tax concessions to encourage small business owners to create jobs. According to the government, 96 per cent of Australian businesses will be eligible for tax relief. The big-ticket item for all small businesses – defined as having a turnover of less than $2 million – is a tax cut of 1.5 per cent. For example, a company with an annual turnover of $1.3 million and a taxable income of $200,000 will be $3000 better off. If you’re starting a small business, life will be easier. Business purchases costing less than $20,000 will be immediately tax deductible. This can apply to as many items as you like – ovens, coffee machines, lawnmowers – while any assets over $20,000 can be pooled together and depreciated at the same rate.
Overview: The 2015 budget deficit is $35.1 billion, dropping to $25.8 billion in 2016, and then $14.4 billion in 2017 with expectation of a return to surplus by 2019.
Future: Treasury forecasts unemployment peaking at 6.5 per cent in 2015 and then falling to 6.25 per cent in 2016. Inflation to rise to 2.5 per cent this year and staying at that level through to 2018/19.
Cost Cutting: Australian official foreign aid budget cut to $4 billion in 2015-16 including 40 per cent cut to aid to Indonesia to $323 million. Stopping paid parental leave being claimed from employer and government at same time.
Big Spending: $5.5bn boost to small businesses and job-creation; Defence budget up by $2.7 billion to $31.8 billion a year; $3.2bn to fund childcare fees.