Budget 2016: Government builds on 2015’s small business bonanza with company tax cuts and extension of $20,000 tax break as deficit comes in at $39.9 billion

parliament house

Small and medium Australian businesses are once again among the winners in the federal budget, with the Turnbull government building on the small business measures contained in the 2015 budget in a bid to further boost the “engine room of the economy”.

Prime Minister Malcolm Turnbull and Treasurer Scott Morrison’s first budget is centred on the theme of “targeted” and “responsible” economic planning, which the government says is essential as Australia’s economy continues to transition away from the mining investment boom.

In his budget speech, Morrison will say the government’s economic plan is based on three key principles: encouraging jobs and growth, fixing elements of the tax system and “continuing to ensure the government lives within its means, to balance the budget and reduce the burden of long term debt”.

“This is not a time to be splashing money around or increasing the tax burden on our economy or hardworking Australians and their families,” Morrison will say.

“Such policies are not a plan for jobs and growth, they simply put our successful economic transition at risk.”

Borrowing rhetoric from former treasurer Joe Hockey, Morrison will put SMEs front and centre of his economic plan.

“Small and medium businesses are driving jobs growth in Australia and must continue to do so,” he will say.

“They are overwhelmingly Australian owned and more likely to reinvest their earnings in future growth, as they seek to build their businesses.”

“A tax on their businesses is a tax on their enterprise and the jobs they provide … Tonight we … share the ambition for smaller businesses to become bigger businesses.”

The 2016 federal budget delivers a budget deficit of $39.9 billion, which is down from $41 billion in 2014-15.

The deficit is projected to drop to $37.1 billion in 2016-17, $26.1 billion in 2017-18, $15.4 billion in 2018-19 and $6 billion in 2019-20.

 

The key budget measures that will affect SMEs are:

 

 

The budget also:

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