South Australia to benefit from a tax plan for Australia’s future

The 2016 Budget is an economic plan for Australia.

It is a plan for a strong new economy with more jobs and growth for South Australians.

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 Hon Christopher Pyne MP said that the Budget would deliver tax cuts and incentives for local small businesses and relief for hard-working families.

“This tax plan backs South Australian individuals and businesses, giving them every opportunity to succeed, making the most of the over $90 billion to be invested in naval shipbuilding in the decades to come.”

“Our tax plan backs hard-working South Australians driving jobs and growth across the state”, Mr Pyne said.

Personal income tax relief

As part of its plan the Government will increase the middle tax bracket threshold from $80,000 to $87,000 from 1 July 2016,

“This important chance will prevent almost 30,000 South Australians on average wages from moving into a higher tax bracket, so that when they earn more they won’t be taxed more,” Mr Pyne said.

“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,” he said.

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 220,675 individuals in South Australia earning $37,000 per year or less will effectively pay no tax on the money they contribute to superannuation,” Mr Pyne said.

Growth in Health and Education funding

Mr Pyne said the budget continues to deliver increases in health and education funding year after year for South Australia.

“South Australia will continue to get its fair share of funding for education, up 23.5% over four years, SA hospitals will receive $5.4 billion over the forward estimates and SA hospitals funding increases by 18% from 2015-16 to 2019-20” Mr Pyne said.

Lowering the tax burden on small business

As Australia transitions from the mining investment boom it is vital that we give Australian businesses every opportunity to invest, grow and employ more Australians.

Mr Pyne said to make it easier for these businesses to expand and create more jobs and make the most of the $90 billion of naval shipbuilding to be invested in the state, the company tax rate will be cut, with small and medium businesses benefitting 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 reducing the tax rate for around 39,193 South Australian companies,” Mr Pyne said.

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.

The Government will also increase access to a range of small business tax concessions to more Australian businesses with turnover of less than $10 million.

Mr Pyne said that this will enable 189,579 businesses in South Australia to access these concessions. Access to the small business capital gains tax concessions will remain at a turnover of less than $2 million.

“Small businesses are the engine room of our local economy and the backbone of our local South Australian community,” Mr Pyne said.

“These tax cuts will provide significant benefit to our local businesses and help drive jobs and growth in our local economy”, he said.