4 May 2016
MEDIA RELEASE – 2016 FEDERAL BUDGET
The focus of the 2016-17 Federal Budget on creating jobs and business productivity has been welcomed by Canberra Business Chamber as it will help the ACT economy continue to diversify and grow.
In particular, the decision to decrease the small business company tax rate to 27.5 per cent and extend this and access to the $20,000 instant asset write-off to companies, with an annual turnover of less than $10 million will help generate business investment and employment.
“This Budget reflects the shift that is occurring towards the service economy and the need to support innovation and small business,” Canberra Business Chamber CEO, Robyn Hendry said.
“Small and medium business is the engine room of the economy. In the ACT, we have around 25,000 businesses and over 95 per cent are small businesses.
“This is not a Budget only focused on helping companies today, but supporting business long-term. The plan to reduce the company tax rate to 25 per cent for all businesses by 2026 is a strategic measure to encourage continued private sector expansion and productivity.
“We applaud this long-term vision, which will see all Canberra businesses eventually benefit from a lower tax rate, and will have to wait to see if any future change of Commonwealth Government impacts on this promise.”
Funding to support businesses upskill and reskill will help companies continue to transform in order to innovate and seek out new opportunities. Through the Youth Jobs PaTH initiative, businesses will have a role in training young people for jobs of the future and reducing the currently high youth unemployment rate. These initiatives will be supplemented by $64.6 million worth of initiatives for businesses to embrace the digital age and increase engagement with science, technology and mathematics education.
Investing in overseas consulates, including opening a new consulate in China, will assist ACT businesses to export and take advantage of recent free trade agreements, including ChAFTA.
“We recently visited China as part of Australia Week in China and the potential of this market for Canberra Region businesses is significant,” Ms Hendry said.
Canberra Business Chamber also applauds measures to reduce red tape for businesses and simplify taxation compliance.
“A commitment to make large multinationals meet their taxation obligations will ensure local businesses do not have to compete with foreign companies who are operating under lighter compliance requirements,” Ms Hendry added.
Beyond business specific measures, the Chamber is disappointed the Budget did not provide any significant new funding for infrastructure projects in the ACT.
“The Budget papers indicate Commonwealth spending on departmental expenses is increasing, but Efficiency Dividends are being extended. We know this so-called blunt instrument approach disproportionately impacts small businesses and our national institutions who have been reducing their expenditure over a number of years now, limiting their potential to grow. We will be watching closely to see the overall impact on employment and business in the ACT,” Ms Hendry said.
“We recognise the need to chart a path to surplus. Supporting business growth is good for the economy and will help Australia get the Budget back in balance.”
Media Contact: Robyn Hendry, CEO Canberra Business Chamber 0418 462 151