Budget 2016

3rd May 2016 | News

Small business gains at the expense of Superannuation.

The budget delivered by Treasurer Scott Morrison lacked spending cuts, but he looked to super to pay for tax cuts. Government over spending was put off for another day, which will give small businesses a kick and the tax cuts will eventually apply to all business bar the big 2,000. The popular instant asset write off was extended to business up to $10 million and the dreaded Deficit Levy goes.

Against this, super is hit hard and some will say the gloss and the paint has been removed. Clearly the Government is not convinced that super keeps people off pensions, despite evidence that it actually does. Why else would they build disincentive to invest? This is a setback for super, but will probably be corrected in later years.

Another positive aspect, however, was no changes to GST or Negative gearing, which both help small businesses and workers.

Overall, a disappointing budget which is not tackling the overspending both parties talk about, but given an election in a few months, not entirely unpredictable. It would have been good if more structural problems were tackled.

Key points from the budget announcement for small businesses:

Small business


Source: Terry Murphy Accountant and former host radio show “Simple Economics”