Federal Member for Aston, the Hon Alan Tudge MP, said the 2016 Federal Budget is an economic plan for Australia focusing on building a strong new economy with more jobs and growth.
As Australia successfully transitions from the mining investment boom to a stronger, more diversified economy, it is vital that our tax system drives economic growth and national prosperity.
The Budget will deliver tax cuts and incentives to boost local small businesses and provide relief for hardworking families in Knox.
“The measures in the Budget will encourage business investment and growth to create the jobs of the future,” Mr Tudge said.
“This tax plan also backs hardworking Australians. It will drive jobs and growth across the country, with real benefits for individuals here in Knox.”
Lowering the tax burden on small business
More than 14,000 small businesses in Knox will have lower taxes as a result of the budget, encouraging them to invest, grow and employ more locally.
The Government will increase access to a range of small business tax concessions to more Australian businesses with turnover of less than $10 million.
Mr Tudge said that this will enable 14,456 businesses in Knox to access these concessions. Access to the small business capital gains tax concessions will remain at a turnover of less than $2 million.
To make it easier for these businesses to expand and create more jobs, the company tax rate will also be cut, with small and medium businesses benefiting first.
From 1 July this year, small and medium businesses with annual turnover less than $10 million will have their company tax rate cut to 27.5 per cent. This will reduce the tax rate for around 4,544 companies in Knox.
Since many small businesses are not companies, from 1 July 2016, the Government will also increase the unincorporated small business tax discount to 8 per cent and extend the threshold from a turnover of $2 million to $5 million.
After the initial increase, the discount will be increased in phases to a final discount rate of 16 per cent from 1 July 2026.
“Small businesses are the engine room of our local economy and the backbone of our local community. These tax cuts will provide significant benefit to our local businesses and help drive jobs and growth in our local economy”, Mr Tudge said.
Personal income tax relief
Middle income Australians are bearing a growing tax burden.
The Turnbull Government will prevent average full time wage earners from moving into a higher tax bracket, so that when they earn more they won’t be taxed more.
The Government will increase the middle tax bracket threshold from $80,000 to $87,000 from 1 July 2016.
This will stop around half a million taxpayers from facing the second top marginal tax rate.
Mr Tudge said that 2,670 average wage earners in Knox would be prevented from facing the 37 per cent marginal tax rate this coming financial year. By pushing up the tax threshold on the middle tax bracket we’ll keep average full time wage earners on the lower rate for longer.
Reducing the tax on superannuation for low income earners
The Government will also introduce a Low Income Superannuation Tax Offset from 1 July 2017. This will ensure that low income earners are not paying more tax on their superannuation than they are on their take-home pay.
This means that 21,580 individuals in Knox earning $37,000 per year or less will effectively pay no tax on the money they contribute to superannuation.
Getting Knox moving
People in Knox will directly benefit from the Turnbull Government’s investment in major road and rail infrastructure projects to get Melbourne moving again.
The Government has allocated $500 million to expand the capacity of the Monash Freeway from Clyde Road in Berwick all the way through to Warrigal Road.
“Anybody who travels on the Monash knows it is a carpark in the mornings and the evenings. This investment will get the Monash moving again,” Mr Tudge said.
Additionally, the Turnbull Government has reconfirmed its commitment of $3 billion of Federal funds to build the vital East West Link and has committed $857 million towards the construction of the Melbourne Metro Rail Project.
Mr Tudge said that the Rowville Rail feasibility study stated that increasing capacity in the metro loop, is a pre-curser to putting more capacity onto the rail network.