Treasury: Regional Australia—A Stronger Economy Delivering Stronger Regions 2018–19

The Treasury provides policy advice on a range of issues from macroeconomic policy settings to microeconomic reform, social policy, as well as tax policy and international agreements and forums.

Further details are provided in the Treasury Portfolio Budget Statement.

New Initiatives

Backing Small Business Investment—further extending the immediate deductibility threshold

The Australian Government will extend the 2015-16 Budget measure Growing Jobs and Small Business—expanding accelerated depreciation for small businesses by a further 12 months to 30 June 2019 for businesses with aggregated annual turnover less than $10 million.

Small businesses, including those in regional areas, will be able to immediately deduct purchases of eligible assets costing less than $20,000 first used or installed ready for use by 30 June 2019. Assets valued at $20,000 or more can continue to be placed into the small business simplified depreciation pool, and the pool can be immediately deducted if the balance is less than $20,000 over this period.

This measure will improve cash flow and support small businesses to invest in assets that will help them grow, such as small businesses in regional areas seeking to purchase assets to expand or set up their business in new locations.

Current Initiatives

Ten Year Enterprise Tax Plan-Increase the Small Business Entity Turnover Threshold

The Australian Government increased the small business entity turnover threshold from $2 million to $10 million per annum from 1 July 2016. The current $2 million annual turnover threshold was retained for access to the small business capital gains tax concessions, and access to the unincorporated small business tax discount has been extended to entities with turnover less than $5 million per annum.

Over 90,000 additional business entities are able to access the small business tax concessions, such as a lower corporate tax rate, immediate tax deductibility of certain assets and simplified depreciation pooling provisions as a result of this measure.

This measure forms part of the Australian Government’s Ten Year Enterprise Tax Plan announced in the 2016-17 Budget, which is encouraging Australians to work, save and invest.

Ten Year Enterprise Tax Plan—Reduce Taxes on Business

The Australian Government reduced the company tax rate to 27.5 per cent for companies with aggregated annual turnover less than $10 million from 2016‑17. The turnover threshold for the lower tax rate increased to $25 million from 2017-18 and will rise to $50 million in 2018-19. The Government is committed to reducing the company tax rate for all companies to 25 per cent by 2026-27.

The Australian Government also increased the tax discount for unincorporated businesses from five per cent to eight per cent in 2016-17. The discount will incrementally increase to 16 per cent in 2026-27. The current cap of $1,000 per individual for each income year has been retained.

The tax discount applies to the income tax payable on the business income received from an unincorporated small business entity. Access to the discount was extended to individual taxpayers with business income from an unincorporated business that has an aggregated annual turnover of less than $5 million from 1 July 2016.

This measure forms part of the Australian Government's Ten Year Enterprise Tax Plan announced in the 2016-17 Budget, which is encouraging Australians to work, save and invest.

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