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Federal Budget 2016: Winners and Losers

Find out what side of the new budget measures you have landed on.


As with every federal budget, some Australians walk away better off while others find themselves worse off. With an election looming, Scott Morrison’s first budget went out of its way to ensure as few people as possible fell into that second category.


But with some careful planning he did manage to find some winners.


Small businesses received immediate tax relief, with all companies to follow over the next decade.


Mr Morrison outlined new financial measures on Tuesday evening, which included tax cuts for middle-income earners and a 2.5 per cent drop in taxes for small businesses.


Over the next 10 years all companies would enjoy a tax break of 5¢ in the dollar, down to 25¢.


“This is not a time to be splashing money around or increasing the tax burden on our economy or on hardworking Australians and their families,” Mr Morrison said.


“Such policies are not a plan for jobs and growth.”


A crackdown on multinational tax avoiders would boost government revenue by $3 billion, according to budget forecasts.


Companies with global revenues more than $1 billion would be slapped with a 40 per cent penalty tax rate, the so-called ‘Google tax’, if caught illegitimately moving funds.


See more on the winners and losers in this year’s budget below.


Winners


Small to medium-sized companies


Company tax rate cut for 870,000 companies with annual turnover less than $10 million; additional 90,000 small businesses can access tax concessions; among other measures.


Those earning more than $80,000


Get a modest tax cut, through increasing second-highest tax bracket from $80,000 to $87,000.


All business – in time


Company tax rate to fall from 30 per cent to 25 per cent over next decade.


Australian Taxation Office


Gets $679 million for a new task force to ensure multinationals, private companies and the super rich pay the right amount of tax.


Working mums, low-income earners


Partners encouraged to top up low-income spouses’ superannuation through extended eligibility to claim tax offset for contributions; allowing women and carers whose work has been interrupted to make catch-up super contributions.


Losers


Anyone earning less than $80,000


Not even a modest tax cut for you. The government says you already benefited through the abolition of the carbon tax.


Multinational tax dodgers​



So-called Google tax to penalise large multinationals that attempt to shift their Australian profits offshore to avoid paying tax.


Smokers


Four annual 12.5 per cent increases in tobacco excise to lift price of packet of cigarettes to about $40 by 2020.


Those for proper tax reform


The government’s long-awaited tax plan amounts to changes rather than widespread reform.


Undecided


Australia’s super rich


Get most of the benefit from tax threshold change, plus end of the budget repair levy in July 2017. But they lose out through reduced access to generous superannuation tax concessions for the most wealthy.


Key points in the 2016 Federal Budget

  • Deficit of $37.1B falling to $6B by 2019/20

  • GDP 2.5 per cent, unemployment 5.5 per cent, inflation 2.0 per cent

  • Small business tax rate falls to 27.5 per cent for more businesses

  • Small business tax rate eligibility turnover threshold increased to $10M, rising to $100M in 2019/20

  • Business tax to fall to 25 per cent by 2026/27

  • Upper limit for middle income tax bracket increased to $87,000

  • Crack down on multi-national tax avoidance

  • Diverted profits penalty rate of 40 per cent on multinationals

  • Superannuation changes including lifetime non-concessional contributions cap of $500,000

  • Increased superannuation flexibility for women and the elderly

  • Tobacco tax up by four annual increases of 12.5 per cent

  • Economy supported by defence spending on subs, frigates and patrol vessels

  • $50 billion infrastructure plan including rail and freight links

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