RSM Australia

Agribusiness

Impact of Budget 2017-18 on Farmers

In 2016 the government introduced measures to increase the small business entity aggregated turnover threshold to $10m from 1 July 2016, increase the unincorporated small business tax discount from 5% to 16% over a 10 year period and reduce small business company tax rates to 27.5%.

In 2017 the Government have extended the $20,000 instant asset write off threshold until 30 June 2018 and have recommitted to reducing the corporate tax rate over 10 years to 25% for all companies.

BUT FARMERS MIGHT BE MORE CONCERNED WITH THE IMPACT ON COSTS ASSOCIATED WITH OTHER MEASURES SUCH AS:

  • A major bank levy from 1 July 2017. The 0.015% levy on a bank's liabilities will raise significant revenue for the government but the charge may be passed on to customers.
  • The new levy on visas shall make solving regional skilled staff shortages more difficult. The extensive list of specialist skills includes, for example, diesel mechanics and that could result in higher costs being passed on to farmers.

    For a business of less than $10m turnover per year, they will be required to make an upfront payment of $1,200 per visa per year for each employee on a Temporary Skill Shortage visa and make a one off payment of $3,000 for each employee being sponsored for a permanent Employer Nomination Scheme (Subclass 186) visa or a permanent Regional Sponsored Migration Scheme (subclass 187) visa. Businesses above $10m pay $1,800 and $5,000 comparatively.

  •  Medicare levy increase from 2% to 2.5% from 1 July 2019.

FIRST HOME BUYERS SUPERANNUATION

There is assistance for first home buyers who may salary sacrifice up to $30,000 in superannuation to build a deposit. 
This could be useful for young farmers looking for a career on the family farm and needing a home.


THE BUDGET 2017-18 IMPACT ON AGRIBUSINESS

The budget impact on farmers in 2017 was probably unlikely to be significant given the substantial tax benefits from the increase to $10m threshold in the 2016 budget. That measure has only recently been passed by the Senate and is still to become law.

The accelerated depreciation rates from this measure in the machinery intensive agricultural industry will realise huge tax savings for many farmers in the next few years encouraging investment in efficiency and new technology.


Learn more about Federal Budget 2017-18:

 << BUDGET INSIGHTS 

 << DOWNLOAD BUDGET REPORT 

Author

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Geoff Hall

Director, Business Advisory

E: [email protected]

T: +61 8 9261 9100


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