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2015 Budget Update

2015 Budget Update

Author: Admin/Saturday, May 16, 2015/Categories: Blog

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The 2015 Budget was released during the week and, unlike the 2014 version, this was a distinctly ‘vanilla’ effort with no significant secrets – or at least none that hadn’t already been reported in the press. The ‘slash and burn’ approach of 2014 has been replaced with a simpler budget which, nonetheless, will have a number of impacts for Australian individuals, families and businesses. Below we outline some of the key outcomes from our perspective. Of course, no budget measure becomes reality until it is passed into law and, if 2014 was any guide, we can expect some measures to either be modified or removed altogether – but time will tell.


Small / medium businesses


Small and medium businesses were the major ‘winners’ from the budget announcement, with the government proposing some beneficial measures for businesses earning less than $2M in revenue:

  • Small businesses might wish to bring forward asset acquisitions under $20,000 as these can be immediately deducted. The law will apply to all assets acquired and installed for use between 12 May 2015 and 30 June 2017.

  • From 1 July 2015 the government will also allow small businesses to immediately deduct professional expenses associated with starting a new business such as professional, legal and accounting advice. Under current law, these costs are deductible over 5 years. The law will give new small businesses some extra tax savings in the start up phase.

  • Small corporations will have their company tax rate reduced to 28.5%. This cut only applies to incorporated entities (ie Pty Ltd structures) however Individuals, Trusts and Partnerships will also benefit by receiving a 5% tax discount capped at $1,000 per individual, for each income year.

  • Small businesses will also be able to change their legal structure – for example, from a sole trader to a Pty Ltd structure – without risking a CGT event. This ‘rollover relief’ will apply from the 2016/17 financial year and beyond.



Primary producers


Primary producers can access an immediate deduction for acquisition and installation of a range of fencing and water / irrigation facilities and equipment. This means accelerated deductions for these capital assets. This measure takes effect from 1 July 2016 so if you are in this category then you may wish to defer such expenditure until this time. And if you are a primary producer with less than $2M in revenue, then the above small / medium business measures may also apply to you.




Multinational tax avoidance has been widely publicised in the lead up to the budget and the government is introducing its own ‘Google tax’ to recoup more income tax from companies that may artificially be avoiding a presence, for tax purposes at least, in the country. The government will initially target 30 multinational corporations with a range of measures. There are generally two schools of thought on this topic: it’s a good thing because they should be paying more tax; or it’s potentially discouraging for multinational investment in Australia. Let’s hope the measures achieve the intended outcome without any side effects to investment.




One of the most significant changes in the budget is that to the Age Pension assets test. The test will be increased to $275,000 (for single homeowners) and $375,000 (for couple homeowners). For non home-owners, this will be $450,000 for singles and $575,000 for couples. There is also a change to the taper rate and where this caps out – ie for every $1,000 of assets over the limit, the pension entitlement will decrease by $3 per fortnight. Essentially, this means some individuals and couples previously eligible for the pension may no longer be.


Other budget measures impacting individuals include:


  • The Temporary Budget Repair Levy of 2% will not be continued, meaning it will end following  the 2016/17 financial year.

  • The number of methods available for calculating work-related car expenses is being reduced to  two, with the ‘1/3 expenses’ and ‘12% cost’ methods to be discontinued from 1 July 2015.

  •  Fly-in Fly-out workers who work in a remote area but whose ‘normal residence’ is a non-  remote area such as a city will no longer be able to claim the zone offset.

  •  There will be a $5,000 grossed up cap on meal entertainment benefits for employees of not-for-  profits from 2016, removing the previous FBT exemption.


Talk to us if you have any questions about your personal or business finances


While we always encourage patience on budget measures, there may be some short-term implications for small and medium businesses worthy of consideration. If you have any queries about your personal or business financial situation, please get in touch with bTa Vantage.


 Disclaimer: This information is generic in nature and provided on a discretionary basis only. You must always seek professional advice regarding its applicability to your own circumstance. 


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