Australian Federal Budget 2016
Posted on: 16.05.2016
What are the main targets of the 2016 Budget?
The main targets of the Australian Federal Budget 2016 are Superannuation, Small to Medium businesses and the Tobacco/cigarette industry.
How is Superannuation affected?
Superannuation is one of biggest targets of this budget, with annual concessional contribution caps lowered to $25,000 from the 1st July 2017. Currently implemented was also the capping of lifetime non-concessional contributions to $500,000. Also, the 30% tax on concessional contributions has now been extended from those earning $300k+ to $250k+. Those with super balances over 1.6 million have been affected as well, as they will no longer be able to roll all savings into retirement funds with tax-free earnings.
There is good news for super though. Those earning between $10,800 and $37,000 will be able to claim an additional tax offset and claim a refund of up to $500 into their super account from tax paid concessional contributions.
What’s in it for Small to Medium size businesses?
On the 1st of July 2016 there will be a 1% reduction for Small Businesses with annual turnovers of $2million or less, and for businesses with turnovers of $10million or less, this reduction increases to 2.5%. These tax cuts are part of a 10 year plan that intends to see company tax reductions cut to 25% by the tax year 2026-2027.
Also included in the budget for businesses with a $10million or less turnover, is an instant tax write off for any equipment purchases up to $20,000 before 30 June 2017.
As well, to tackle the minor creeping of personal income brackets, the 37% marginal tax rate that used to kick in once you reach $80,000 will not apply until your taxable income reaches $87,000.
Tobacco, Cigarettes and Smokers will take the biggest hit!
Starting on the 1st of September 2017 there will be an increase of 12.5% each year for four years, bringing the average price of a packet of cigarettes in 2021 to around $40. There’s never been a better time to quit the habit and save the money.
For more information check out –
Budget 2016 – liberal.org.au
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