"In an important boost to the capacity of businesses to invest and create jobs, the Budget sets a gradual path to restore the competitiveness of Australia's company tax system. While the two-tiered company tax system will continue for a number of years and it will be a decade before the company tax rate will reach 25%, many small to medium-sized businesses will see more immediate benefits and face improved incentives to invest. The clear risk involved in such a gradual phase down is that the international competitiveness benchmark could well be closer to 20% by 2026-27.
"Extending eligibility to small business tax measures to companies with turnovers of up to $10 million a year will provide a shot in the arm for up to 60,000 small to medium-sized businesses and for the economy from 1 July this year. In addition, small businesses operating as companies and many unincorporated businesses will also enjoy tax relief. These measures, as well as the rise in the $80,000 personal tax threshold to $87,000 is a timely boost to the economy and will underwrite improved living standards.
"Ai Group welcomes new measures to address tax avoidance and aggressive tax planning. Businesses and individuals have an obligation to comply with the tax law and the vast majority do. It will be critical for the Government to consult widely over the proposed Diverted Profits Tax and the new Tax Transparency Code. A particular area of renewed focus should be on combatting the cash economy.
"Business will also welcome the development of new pathways helping young people enter the workforce. By making young people become more work-ready through pre-employment training and internships, the Youth Jobs PaTH initiative targets a leading concern of business around employability and backs these measures with accelerated and simpler wage subsidies. These measures will assist businesses make an important contribution to improving the lifelong employment prospects of eligible young people.
"The ongoing budget commitment to innovation is positive. Leaving the Research and Development Tax Incentive untouched is a crucial step in rebuilding business confidence in this important program.
"The further commitment to improving Australia's urban and regional transport infrastructure including the early-stage work on the inland rail project is welcome.
"Ai Group also welcomes the continuation of a healthy permanent migration program with a strong focus on skilled immigration.
"The Government's renewed efforts in higher education and its commitment to consultation with the higher education sector and with business are to be applauded. Its determination to fix the VET FEE HELP scheme is an important step in lifting the confidence in Australia's Vocational and Training system. Without question a major challenge in Australia's training system over the coming years will be to overhaul the Apprenticeship system.
"The biggest disappointment is the deep cut in funding for the Industry Skills Fund. This is a setback for improving workforce capability at a time of major changes in workplaces and the workforce," Mr Willox said.
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