Federal Budget 2016 - 17
The 2016-17 Budget projections for growth and jobs depend on continued strong performance by the construction sector says the Property Council of Australia.
Following on from the announcement last weekend, the Government has once again confirmed there will be no changes to negative gearing or capital gains tax arrangements for property investments, Property Council of Australia Northern Territory Director Ruth Palmer said.
“In his budget speech, the Treasurer reiterated that removing or limiting negative gearing would increase the tax burden on Australians who are simply trying to invest and provide a future for their families.
“23,100 Territorians own an investment property in the Northern Territory including 16,700 who use negative gearing. We believe adverse changes to negative gearing and other taxes that help drive investment are a risky intervention in housing markets, it is encouraging to see that this has not been affected in the Budget.”
From 1 July 2016, businesses with turnover of less than $10 million will have a 27.5% company tax rate.
“Government has committed to a 10 year “glidepath” to reduce the company tax rate to 25% for all companies.” Ms Palmer said.
“Government will also extend the unincorporated tax discount to unincorporated businesses with annual turnover of less than $5 million and increase the discount to 8% on 1 July 2016 up to a maximum of $1,000.
“For the 2016-17 financial year, businesses with turnover of less than $10 million will be eligible for an immediate tax deduction for equipment costing less than $20,000.
“From 1 July 2016, Government will increase the tax threshold at which the 32.5% tax rate applies from $80,000 to $87,000.
Property Council of Australia Chief Executive Officer Ken Morrison said he was disappointed that the Budget contained no plan for further reform of taxation arrangements.
“It seems the Government has given up on taxation reform. We know tax reform is difficult, but it is essential if we are to boost growth over the long term.
“Whatever benefit Australians will get from cuts to company law and PAYE taxes over coming years is offset by the drag on our economy from inefficient taxes.
“Stamp duty, in particular, is a drag on growth and jobs as well as a huge hit on homebuyers and investors. If we are to have meaningful tax reform, the States and Territories have to be part of it.”
Government has retained its housing affordability funding to support the states and territories and did confirm that it will not make any changes to negative gearing or capital gains tax.
“However, the Budget does not contain any new initiatives to address housing affordability.” Ms Palmer said.
“We will continue to advocate for an incentives-based reform model to encourage housing supply, in accordance with the research paper that we released last week.”
Media contact: Ruth Palmer | M 0450 428 314 | E [email protected]