8 May 2018
The 2018-19 Federal Budget is a pre-election pitch which will bring widespread tax relief to the greater economy, Business SA says, and encourage spending as we return to surplus earlier than anticipated.
Business SA Executive Director Industry and Government Engagement, Anthony Penney, said the budget was clearly aimed at stimulating the economy by putting up to $530 cash back into low to medium wage earners pockets.
“South Australians will benefit from road upgrades, tax cuts and cheaper craft beer,” Mr Penney said.
“Businesses will also benefit from the extension of the instant asset write-off scheme for small to medium-sized enterprises, and skills development for Australians aged over 45 to gain and remain in the workplace.”
Mr Penney said the headline budget sweetener for South Australia was the Federal Government’s infrastructure spend, with the state receiving just $1.8 billion in new funding over forward estimates from the $24.5bn spend.
The funding will be spent predominately on the north-south corridor and duplicating Port Augusta’s Joy Baluch Bridge, which Business SA called for in the
2018 Charter for a More Prosperous South Australia, along with the Gawler rail line electrification.
The Government will provide $20 million in supplementary local road funding for South Australian councils, building on the $20m budgeted last financial year. This funding will benefit South Australian businesses using the road network and will provide a boost for the local construction sector.
In a win for businesses with turnover below $10m, the $20,000 Instant Asset Write-Off has been extended for 12 months. This program allows businesses to write-off up to $20,000 worth of eligible capital expenditure, which will improve cash flow for SMEs and boost business activity.
The Federal Budget has been boosted by the buoyant conditions businesses are experiencing, with owners and managers more confident than they have been in several years.
Mr Penney said the seven-year personal income tax plan would provide relief for low and middle-income earners, with workers saving up to $530 per year through tax offsets. Future changes are earmarked to address bracket creep and eliminate the 37-cent tax bracket.
“More money in people’s pockets means more money going into the local economy - whether it be buying the odd extra coffee or that much-needed new washing machine,” he said.
Mature-age workers who struggle to find a job will benefit from subsidies offered to employers, and the Pension Work Bonus has been expanded to include self-employed retirees.
Despite the range of tax cuts and incentives designed to stimulate the economy and business growth, Business SA has concerns about changes to the research and development tax incentive. While aimed at improving integrity, the proposed changes may impact on incentives for medium-sized businesses to undertake genuine research.
For interviews and comment please contact Verity Edwards, Director of Media and Communications on (08) 8300 0221 / 0412 678 942 or email [email protected]