The Federal Budget was released this week. Here’s the Canberra spin version:
What does it mean for the Timber Flooring Industry? In a nutshell*, not so great for companies, but some perks for small business.
1. Company Tax: The Feds promised to reduce company tax rate by 1%, and this promise has been scrapped.
2. Loss Carry Back: Companies will be able to carry back-tax losses (to a limit of $1m) as far as two years. In short this means that if they’ve made profits sometime in the last two years, but make a loss next year, they are eligible for a refund of a proportion of the tax previously paid.
3. Tax breaks for small business: Not expansive tax breaks, but a break on depreciating assets. Any assett worth under $6500 can be fully written off with the total amount reducing the taxable income. New or used motor vehicles will draw an immediate write-off deduction of $5000. If you were thinking of buying a company vehicle, perhaps hold off until after July 1.
The spin doctors say these breaks will “support productivity and promote employment“. We sure hope so. Some might feel that, while these tax breaks are good, they are a smidgeon of what should have been done several years ago, in the place of stimulus handouts for Plasma TVs and pink batts. Still, it will take the sting out of what may be a tight year for small business and the construction industry…
*NOT financial advice! Consult your business accountant.