People who earn about $80,000
The government is increasing the upper limit for the second highest tax bracket of 37 cents in the dollar from $80,000 to $87,000. Rather than being taxed at 37% on every dollar earned over $80,000, people in that range will remain on the 32.5% tax rate.
Both big and small business
Government increase the size of business that have access to lower tax rate of 27.5%, and then reduce the tax rate for all business to 25%. The threshold will raise from $10m to $25m in 2017-18, to $50m in 2018-19, and $100m in 2019-20. The threshold will raise every year until 2023-24, before a final tax cut for all businesses to 25% in 2026-27.
The instant tax deduction for business equipment under $20,000 that was introduced for small entity last year, will be extended to businesses with turnover less than $10m.
Starting in April 2017, job seekers under age of 25 will be able to register for ‘intensive pre-employment skills training’ focusing on skills including working in a team, presentation and computer literacy.The government then work with businesses to introduce an internship program where job seekers are working 15-25 hours a week for between one and three months.The government will subsidize part of jobseekers’ income as well as business upfront fees.
People on low incomes
The Medicare levy low-income thresholds will be increased to $21,335, thus low-income taxpayers can still be exempted from paying the Medicare levy.
The Government has relieved nerves among owners who fears they may lose their investment income due to negative gearing and capital gains discounts.
Changes to those measures would also see house prices down, relieving some pressure on those looking to enter the market.
Treasurer Scott Morrison decided not to make any changes to negative gearing and capital gains tax.
Although the tax concessions are pushing house prices higher, which is bad news for property seekers, the Government is not going to increase the tax burden on Australians who are just trying to invest.
Reference: ‘Budget 2016 winners and losers’ 2016, News.com.au, viewed 20 May 2016,