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What do budget changes mean for YOU?

Budget day means big news for everyone! New changes to the Federal Budget were announced last week on Tuesday 3rd May, and the changes affect every man and his dog. So whether you’re just starting out in the working world, are unemployed, or expanding your global business into something spectacular, listen up!

Reforms to the budget are an attempt to decrease the deficit, i.e. the overhanging debt owed by the Australian economy. This currently stands at an unhealthy $37.1 billion – a hefty hangover for the Australian Government. Hydrating this hangover will take more than a Berocca and a carb-fix, so the Australian government have made changes to the Federal Budget which affects each and everyone in the working world and those new to it.  

Budget talk and politics jargon can often sound like uninviting gobbledygook, so we’ve lassoed the top budget budges that impact employees, employers and potentials of the like, in the Australia:

For businesses

  • Small business tax rate is cut to 27.5% from 1st July 2016, and within the next decade (by 2026-27) will go dwindle down to 25% for all businesses.
  • Company tax rate will gradually fall to 25% by July 2026.
  • Diverted profits tax of 40% for multinational firms such as Google and Apple who attempt or have attempted to shift tax offshore – otherwise known as a slap on the wrist for these global giants. From 1st July 2018, lighter taxes will be awarded to whistleblowers who snitch such misbehavings.

For employees

  • Low income earners (those earning less up to $37,000) will see a cute refund of $500 added to their super account, also known as the Low Income Superannuation Tax Offset.
  • Middle earners earning more than $37,000 and less than $80,000 – no further relief.
  • Upper-middle earners (or those earning between $80,000-87,000) will pay less income tax, now capped at 32.5%. This will save you an extra $6 per week on average, the equivalent of a taco.
  • High-income earners will see a not-so-super fall in their superannuation now that the tax-free threshold will fall from $300,000 to $250,000.
  • Your daily commute could get a whole lot easier, with Government plans to invest $3 billion on new infrastructure projects. The majority of work will be in Victoria with a focus on roads.
  • Starting 1st July 2017, the Youth Jobs Path program for working world newbies under 25 years and unemployed is here to help. This is a $752 million scheme for jobseekers to get hands-on work experience, which is said to provide around 30,000 places each year, 15-25 hours of work per week and jobseekers can receive $200 a fortnight on top of regular welfare benefits. Beware, the small print states you must have been looking for a job for at least six months.

But watch this space! ...There is still a list of budget decisions worth about $1.6 billion big ones that are "not yet announced", which plan to save the Government around $2 billion by 2019.

You can find a full overview of budget changes at: http://budget.gov.au/2016-17/content/glossies/overview/html/

 

By Heather Doherty

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