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2015/16 Federal Budget Summary

Small business:

– Depreciation

Small business with an anuual turnover of less than $2mil will be able to immediately deduct assets they start to use or install ready for use costing less than $20,000. Currently this is at $1,000.

This applies for all assets purchased between 12th May 2015 at 7:30pm and 30 June 2017.

If the small business simplified depreciation pool of your business is less than $20,000 this can also be immediately deducted. 

– Tax cuts

From the 2015/16 income year the government will reduce the company tax rate from 30% to 28.5% for small businesses under $2 million turnover.

– 5% discount on tax payable for other tax payers

Individual tax payers with business income with a turnover of less than $2mil will be eligible for a small business tax discount.

The discount will be 5% of the income tax payable on the business income capped at $1,000 per individual.

This will be delivered as a tax offset.

Car deductions:

– Claiming car deductions

Currently there are four methods to claim motor vehicle expenses.  This will be reduced to two being the cents per km method and log book method.

The cents per km rate will be changed from the current three sets of rates based on car size to a single rate of 66c per km.


– Limited Recourse Borrowing Arrangement

In good news for super the government did not make any major adjustments to superannuation and limited recourse borrowing arrangements (LRBAs). We do however still expect a tightening to the existing LRBA legislation in response to the FSI report in the near future.

Age Pension:

– Changes to means test

From 1 January 2017 there will be several changes. There will be an increase to the ‘asset free area’ to get the full pension. There will also however be a reduction to the part-pension cut-out threshold.

Impacted pensioners are guranteed eligibility for either Commonwealth Seniors Health Card or Health Care Card.

The changes to indexation of the age pension announced in the last budget will not proceed.

Business start-ups:

– Immediate write off of professional expenses

Currently professional costs associated with commencing a new business are deducted over five years. From 1 July 2015 these can be written off immediately.  Costs include professional, legal and accounting advice.


For a more comprehensive budget analysis download the file below.

Macquarie – 2015 Federal Budget

If you have any particular queries on the implications of these or other budget matters please contact us (03) 9370 1989.