Small business gets tax cut, new 457 levy

Small business gets tax cut, new 457 levy

The government has announced it will reduce the tax burden on small businesses, while also imposing a levy on those that sponsor migrants.


In the federal budget, the government said it is committed to cutting the company tax rate to 25 per cent for all businesses as a way to increase Australia’s competitiveness, attract investment and protect jobs from being  taken overseas.

Small businesses with a turnover of up to $10 million will also be able to immediately write off expenditure up to $20,000 for a further year to 30 June 2018.

This is intended to improve cash flow and help small businesses reinvest in their business and replace or upgrade their assets.

Further, the government intends to cut red tape for small businesses by providing $300 million over two years to states and territories. The goal is to reduce unnecessary regulatory restrictions on competition and small businesses.

“Small business owners are out there fighting for growth in their businesses every day,” Treasurer Scott Morrison said in a speech.

“They deserve our respect and support.”

At the same time, however, the government said it require companies to pay a levy if they sponsor migrant workers under the new temporary skill shortage visa and certain permanent skilled visas.

This levy will be used toward the “Skilling Australians Fund”, which will pay for the training of Australians.

As part of the fund, an estimated $1.5 billion will be provided over the first four years to underpin a new partnership with states and territories, with spending prioritised towards apprenticeships and traineeships.

“Skilled migration has always played a significant role in driving our economic growth. But it must be on our terms and we must skill more Australians to secure jobs,” Mr Morrison said.

“Until now, employers have had to contribute 1 or 2 per cent of their payroll to training if they employ foreign workers. These requirements have proven difficult to police.”

He continued, “Accordingly, we are replacing these requirements with an annual foreign worker levy of $1,200 or $1,800 per worker per year on temporary work visas and a $3,000 or $5,000 one-off levy for those on a permanent skilled visa.

“Over the next four years, $1.2 billion will be raised from this levy that will contribute directly to a new Commonwealth-State Skilling Australians Fund. States and territories will only be able to draw on this fund when they deliver on their commitments to train new apprentices.”

Read more:

APRA given power to strip executive bonuses

Fintech sector receives federal budget 'boost'

New tax incentives to tackle housing affordability

Return to surplus slated for 2020-21

New dispute resolution body outlined

 

Small business gets tax cut, new 457 levy
investordaily image
ID logo
promoted stories

Appointments

investordaily image

AMP names incoming chief risk officer

Jessica Yun

investordaily image

Antares Equities hires new director

Staff Reporter

Brad Fox

Former AFA CEO appointed to boutique board

Staff Reporter

Analysis

ST Wong

Busting common passive investing myths

ST Wong

investordaily image

The long-term case for real estate

Chris Bedingfield

investordaily image

Shining a light on investment options

Stuart Hoy