Scott Morrison’s first budget charts a steady return to surplus with disciplined spending and a bold plan to support job-creating businesses in Australia.
Just hours after the RBA announced it would drop interest rates to an historic 1.75 per cent – the first decrease in 12 months – the Treasurer outlined a fiscally responsible pre-election budget designed to help businesses and households.
Mr Morrison used the budget to unveil a “Ten Year Enterprise Tax Plan” to boost investment, create jobs, increase wages and support small and medium businesses.
“Australians know that our future depends on how well we continue to grow and shape our economy as we transition from the unprecedented mining investment boom to a stronger, more diverse, new economy,” he told Parliament.
“They know that their future, their jobs and those of their children and grandchildren depend on it. This is a very sensitive time.”
The budget included significant wins for business, including an announcement that the corporate tax rate would be gradually cut to 25 per cent over for all businesses over the coming decade.
“We will give hard-working Australians, and the thousands of Australian businesses that employ them, some tax relief so that when they earn more, they won’t be taxed more,” Mr Morrison said.
More businesses would also be able to access accelerated depreciation benefits following an increase in the eligibility threshold from $2 million to $10 million turnover.
► Read more: Business the big winner for 2016 Federal Budget.
Discipline around government spending saw the budget bottom line grow by just $1.7 billion over the coming four years.
The overall picture for the budget in 2016-17 is a deficit of $37.1 billion, decreasing to $6 billion by 2019-20 before returning to balance in 2020-21.
“We will continue to cut unnecessary waste and keep government spending under control to balance the budget over time,” he said.
Mr Morrison said any increases in tax revenues were being re-invested in lower taxes elsewhere.
“Our new spending commitments have been more than offset by our disciplined restraint and better targeting of spending in other areas,” he said.
► The Federal Budget comes ahead of the WA State Budget which will be handed down by WA Treasurer Mike Nahan next Thursday.