The 2016 federal budget affects every Australian, from those who struggle to find their first job to those who already have a comfortable life. But what does the federal budget mean for you this year?
Federal Budget 2016
For those who couldn’t find their first job yet
In this case, the news is good for you, because you will benefit from programs specially designed for your need. Youth Jobs PaTH (Prepare, Trial, and Hire) is meant to help 120,000 job seekers to enter the workforce. First of all, there will be a training program to help young Aussies get the necessary skills for a job, and then they will benefit from an internship. This internship program consists of 15 to 25 working hours per week, for one to three months. The government offers an extra $200 per fortnight in order to support payment.
For those who have an income of about $80,000 per year
About 500,000 Australians who earn over $80,000 a year benefit from a tax cut. If the upper limit for the second highest tax bracket was $80,000 in the past, now this is raised up to $87,000. This means that if you have an annual income between $80,000 and $87,000, you will no longer pay taxes of 37% for each dollar you earned, but only 32.5%.
However, over the next four years, the budget will lose almost 4 billion dollars because of this change.
For those who have low income
The 2016 federal budget brings good news for low-income earners, too. The government will increase the threshold, to $21,335 per year for singles, to $36,001 for couples with no children, and to $46,996 for senior couples. Those who have children will benefit from an additional amount of threshold of $3306 for each child dependent on them.
The tax offset will also be kept so that taxes will be lower for those earning less than $37,000 per year.
For those who have a small business
You will be pleased to find out that this federal budget is offering another tax cut for small businesses.
Last year, the tax rate was reduced from 30% to 28.5% for companies which had a turnover lower than $2 million. This year, the tax rate is reduced to 27,.5%, but the change is available for businesses with a turnover of less than $10 million.
This means that around 870,000 small businesses will have their tax reduced due to the 2016 federal budget. Another opportunity for small business owners is the instant tax deduction, available for business equipment. If this applied only to equipment under $20,000 last year, this year, the tax deduction is available for businesses with under $10 million turnover. But don’t wait too much, as your company can benefit from it only until 30 June 2017.