Federal Finance Minister Mathias Cormann will headline a CCIWA breakfast this Monday to unpack this year’s Federal Budget, which the CCI says will boost jobs and business confidence in Western Australia.
The high score came with a warning from CCIWA Chief Executive Officer Chris Rodwell that spending restraint needed to continue to be a focus, given that the global economic growth underpinning the positive Budget isn’t guaranteed.
The Budget is forecast to be back in surplus a year earlier than forecast – $2.2 billion in 2019-20 – and offered a forecast reduction in net debt of $21.7 billion by the end of the forward estimates.
“Reining in spending to reduce net debt must, however, remain a priority for the Federal Government, with the interest repayments to service this debt costing taxpayers $12 billion per year,” Rodwell said.
Budget measures included reduced taxes for low and middle-income earners, changes to superannuation management to remove exit fees and chase up lost super, and incentives for employers to take on older workers.
For the first time, self-employed pensioners will be able to earn up to $7800 per year more before their pension begins to be reduced.
Older Australians will be able to earn $1300 more per year before cuts to their pension.
The Treasurer Scott Morrison promised full implementation of the Government’s enterprise tax plan, which he said was needed for business to remain internationally competitive.
This would also help to increase trade for smaller business through the supply chain.
Morrison said these measures would ensure small businesses didn’t get ‘ripped off’ by bigger businesses which deliberately went bust to avoid paying taxes, using a practice known as “phoenixing” (when a business declares itself bankrupt to avoid paying its bills, and then creates a new company providing the same service).
Meanwhile, the government expects to bring in $5.3bn over the next four years by implementing the recommendations of its Black Economy Taskforce, which will target those who under-report income.
The measures include outlawing large cash payments of more than $10,000.
“This will be bad news for criminal gangs, terrorists and those who are just trying to cheat on their tax or get a discount for letting someone else cheat on their tax,” Morrison said.
The Government will provide $318.5m over the next four years to combat the so-called ‘black economy’ with an enhanced enforcement strategy including ATO mobile strike teams, increased audit presence and a ‘black economy’ hotline.
Mr Rodwell said that, overall, it was a positive budget for business.
“CCI congratulates the Federal Government for standing strong on its company tax policy. WA relies on attracting global investment so if we want to continue to attract investment to WA, we must be competitive across the board, including our tax mix,” he said.
See the CCI’s full analysis of the Federal Budget.