Small and medium-sized businesses are among the winners from the federal budget for the second year in a row.
While the budget deficit has come in at $39.9 billion for the 2015-16 financial year, the federal government has announced an extension of the $20,000 instant asset write-off scheme to businesses turning over up to $10 million a year, among other small business-friendly policies.
From July 1, SMEs turning over up to $10 million will also pay a reduced company tax rate of 27.5%.
While these policies have been touted as good for small businesses across the board, as with any budget, some industries will be better off than others.
Here’s a breakdown of what the 2016 federal budget means for some of key sectors of the economy.
This year’s budget wasn’t a big one for the agricultural sector.
While the government has allocated an additional $50 million to promote Australian wine overseas over the next four years, it is also reducing the Wine Equalisation Tax rebate in a bid to improve the “integrity” of the current rules.
The budget also had no mention of changes to the controversial ‘backpacker tax’, infuriating farmers and fruit growers.
National Farmers’ Federation president Brent Finlay said in a statement regional and rural businesses will be hurt by the backpacker tax.
“There were literally thousands of farming families, agricultural businesses and tourism operators who were desperately hoping the backpacker tax, in its current form, would be abandoned in tonight’s budget,” Finlay said.
“It is now time for the government to respond to the risk imposed on the sector by a measure that will chase working holiday makers away from Australia.”
Health and education
The government will provide an additional $2.9 billion from 2017-2020 to support public hospitals.
An additional $1.2 billion will be given to schools between 2018 and 2020.
However, aged care services are facing significant savings, with $1.2 billion cuts to the Aged Care Funding Instrument over four years.
One of the biggest infrastructure projects in the budget was the $594 million commitment to an inland rail networking from Brisbane to Melbourne.
The project is good news for Australian businesses on the east coast who would like to reduce their freight costs.
However, there is no additional funding to fix mobile phone blackspots, which will likely anger regional businesses and be a key issue leading into the election.
The Government plans to spend an additional $29.9 billion on defence in 2016-17 as part of its Defence White Paper.
This is good news for SMEs that supply goods and services to the defence sector.
The government will also direct this money towards promoting maritime security and stability in the Middle East.
Those in the defence sector will also welcome the government spending $38 million over four years to help better treat PTSD disorders.