The new changes to the Australian federal budget were announced recently and small business owners will receive some big benefits along with a few others. The government is targeting some groups hoping to help grow the Australian economy. Views on the new budget vary wildly but everyone can agree that some sections of society with benefit more than others.
Benefits to Small Businesses
In an effort to expand the economy and help small businesses grow, the Abbott government has implemented several initiatives. For small businesses with revenues less than $2 million a year, all purchases on equipment priced under $20,000 will be tax write offs. That can be a huge help for a growing businesses that need both capital and equipment. These are the kind of tax breaks that help small businesses grow by being able to reinvest themselves and hire more employees. Those same small businesses with revenues under $2 million a year will have their tax rate lowered to 28.5% from 30%. This tax break means that small businesses in Australia have the opportunity to make big leaps in the coming years from these plans.
The government’s decision to keep negative gearing along with the record low interest rates will allow Australians to buy homes and even invest in the rental property market. In an effort to hamper the growing amount of foreign investors who are entering the Australian property market, the Abbott government is requiring foreign investors to pay large application fees when purchasing properties in Australia. Some fear that the fees are not high enough to stem the home buyers from abroad.
Small businesses and individuals investing in property were not the only likely ones happy to hear of the changes to the federal budget. Well-off retirees were happy to not have their Age Pension benefits curtailed and at the same time will still continue to profit from capital gains tax discounts.
Many of the changes the Abbott government has made to the 2015 budget will have immediate effects on the lives of Australian citizens and small businesses but some of the changes will have lasting effects that can be hard to predict. Any effort to expand business and grow the economy is welcome and for some, the new government’s federal budget is greeted with excitement.