Australian Federal Treasurer, Scott Marrison pictured a bright future for the national economy when talking about the Federal Budget 2017.
He pointed to the economy improvement with mixing evidences of substantial government investment on Australian infrastructure and increasing benefits for first-home buyers together with signaling the forthcoming budget reductions on some welfare spending. Overall, the objective of the Federal Budget 2017 is set to serve Australian residents with more growth opportunities, elevated securities, and enhanced fair treatment. The results of these measures are to facilitate the government with financial independence for its routine expenses and contribute to a cash surplus of almost $* 7.5 billion in 2021. In addition, the economy growth is estimated to be 2.75 per cent for the financial year 2017/18.
* All dollars are Australian dollars.
Although rectification of extending immediate write-off for small business entities assets and introduction of a new Medical Guarantee Fund to support senior citizens were delightful news for CPA Australia, others have been impacted by this year’s budget in various ways.
In the following the groups who win or lose some benefits through the implementation of the 2017 budget are presented and discussed.
Generally, federal Budget 2017 bring about advantages for
Entrepreneurs and self-employed individuals with annual turnover of $ 10 million or lower are allowed for a $ 20,000 instant write-off for assets bought in 2017 budget while it was previously discussed to be reduced to $1,000.
Regional government communities are funded by $ 472 million, called Regional Growth Fund, out of which $200 million will be invested on Building Better Regions program. This funding boosts the Australian Rail Track Corporation equity to $ 8.4 billion to commence railway construction from Melbourne to Brisbane in 2017/18 financial year.
The option of saving superannuation contribution taxed at 15 per cent rather than marginal rate for first-home buyers wets the property industry. However, the annual allowable superannuation saving for every taxpayer to buy their first property is $15,000 with the total $30,000 saving threshold.
Housing industry will also enjoy elevated demands and large homes vacancies via the new legislation of non-concessional superannuation contribution of maximum $300,000 by seniors with 65 years old or more. Principal residence sales proceeds is used to finance this contribution.
As per Treasurer announcement, the remarkable fund of $75 billion is budgeted to be paid for infrastructural projects over a period of a decade starting from 2017. National Rail Program and Western Sydney Airport are among the most prominent projects having the latter to be started from July 2018 and the former to be finalized with $10 billion spending.
Although imposing higher Medicare levy fees seems to upset Australian tax payers, the extra charges will be used to pay for National Disability Insurance Scheme (NDIS) and mental health treatments.
The parties who have not welcomed the budget 2017 reforms are as below:
Upon imposing an extra 0.5 per cent on Medicare Levy from 2019/20 tax year, all tax payers in Australia are charged to finance the last group of winners mentioned above, health industry.
Government lenses on banks gets tighter by facilitating customers to sue banks in Australian Financial Complaints Authority, recently established. Moreover, the fine rates for bankers misconduct and a 6 basis-point levy imposed on banks liabilities within the next financial year bares huge burdens for banking industry, having the latter to liquidate the government by $6.2 billion.
Although property and houses will be on demand for some group of people like first home buyers via superannuation account, foreigners are prevented to claim their capital gains tax exemption on their main residency property. In cases they are unable to live in that property or to secure a tenant for it, payment of $ 5,000 is inevitable.
Meanwhile, property developers are limited to the 50 per cent ceiling sales of properties to foreigners.
Individuals receiving welfare proceeds lose some facilities while not attending the job interviews will cause serious consequences.
Foreigners again are damaged by more obligations imposed on their employers to pay amounts of $1,200 or $1800 per year and also $ 5,000, one-off, if holding temporary and permanent working visa respectively.
Multinational Entities (MNEs) are probably to pay more corporate tax because of applying anti-avoidance legislations on their dealings with foreign partnerships and trusts. Using hybrid structure are also prohibited via Multinational Anti-Avoidance Law.