The focus for the budget was to support the economy through the transition to non-mining led growth, boosting government spending for small businesses. The small business package should provide support to the economy, including through the retail sector. It was a benign budget that should help consumer confidence and the overall impact on the economy should be mildly positive.
Main points
The budget proposed significant changes for families, retirees and SMEs but few of interest to high net worth individuals.
- Slightly better than expected deficit of $35.1bn 2015-16, improving gradually over the next five years with the underlying cash balance in surplus from 2019-20.
- A return to above-trend GDP growth in 2016-17.
- Unemployment expected to peak next financial year at 6.5%.
- The terms of trade expected to fall a further 8.5% in 2015-16 and then stabilise.
- If you enter a residential aged care facility from 2016 onwards, any rental income generated by your former home will be assessed when determining your aged care fees.
- Pension assets test changes could mean some higher net worth retirees receive reduced entitlements.
- The company tax rate for eligible small businesses will be reduced by 1.5%.
- Unincorporated small businesses will receive a 5% tax discount.
- Small businesses will be able to fully deduct capital expenses of up to $20,000 per annum.