Empowering businesses to grow, invest and support a stronger economy

Lower taxes to support growth

Lower taxes help Australian businesses to invest, grow, create more jobs, pay their workers more and remain competitive in a global economy.

The Government has already delivered tax relief for 3.3 million small and medium sized businesses, employing 6.8 million workers, under its Ten Year Enterprise Tax Plan which is delivering investment and creating jobs. And it remains committed to extending the tax cuts to all businesses.

Building a smart economy by investing in science and technology

The Government is investing around $2.4 billion to boost Australia’s public technology infrastructure, including supercomputers, world class satellite imagery, a national space agency, research into artificial intelligence and more accurate GPS.

This investment supports businesses to grow and employ more Australians in a smarter economy.

Delivering major transport infrastructure

This Budget includes $24.5 billion in new projects and initiatives that benefit every State and Territory. These form part of the Government’s $75 billion transport infrastructure investment over the next decade.

This investment in road, rail and public transport projects will bust congestion, boost productivity and improve safety.

A world health industry leader

A new 21st century Medical Industry Growth Plan will deliver $1.3 billion to fund revolutionary genomic research projects investigating medicines that can be tailored to individual patients, clinical trials of new drugs and development of new medical technologies.

This will ensure Australia remains a global leader in medical technology, biotechnology and pharmaceuticals while improving the health of Australians by investing in medical research.

Securing access to export markets

The Government has secured landmark export deals that will allow Australian businesses to access new markets. The Government has signed export trade deals with China, South Korea and Japan and has also signed on to the Trans-Pacific Partnership (TPP-11).

Backing our farmers

The Government is backing our farmers by enhancing water infrastructure, upgrading GPS capabilities for regional Australians and increasing funding to manage and protect against pests, weeds and disease. The Government will also fund additional agricultural trade experts to help farmers export Australian products to the world.

A competitive tax system

For businesses

Making Australian business more competitive

The Government is building a tax system that is internationally competitive, rewards effort and underpins a strong economy

Without sensible tax relief, we risk entering the next decade with a tax system that not only holds Australians back, but puts at risk a stronger economy that can fund our essential services.

Internationally, we are at risk of falling behind. Australia's high business taxes will become a drag on investment. While we stand still almost every other OECD country has lowered its effective tax rate on investment. Without change, we risk entering the next decade with a tax system that requires our businesses to pay one of the highest corporate rates of tax in the OECD.

The Government has already legislated tax cuts for Australian businesses with a turnover under $50 million, taking their rates from 30 per cent to 27.5 per cent and eventually to 25 per cent, and we remain committed to extending those tax cuts to all businesses.

Our full Enterprise Tax Plan will reduce the company tax rate to around the median of the OECD. This will keep Australia competitive.

The productivity benefits of these changes will flow through to workers in the form of higher wages.

While tax should be lower, fairer and simpler, it also should be paid. Every individual and business should pay their fair share of tax.

The top ten companies paid 27 per cent of total corporate tax in 2015‑16 – more than the amount paid by almost one million small companies across Australia.

ATO data shows that the top 50 companies paid 38 per cent of all corporate tax collected.

We are also clamping down on multinationals and those who think they are above the tax laws by targeting the black economy. The Diverted Profits Tax and the Multinational Anti‑Avoidance Law combined with a number of other integrity measures mean that Australia has some of the most robust tax rules on companies applied globally.

More competitive business taxes

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Source: OECD Revenue Statistics and Treasury (May 2018)
Note: All listed rates are combined central and provincial government company tax rates (inclusive of surcharges).
All listed rates are current as of 1 May 2018.

For more information visit the Stronger growth section

Backing Australian Business

Backing businesses to invest and create more jobs

Continuing to back Australian business growth and investment

Reducing the tax burden on businesses will help them invest, grow, employ more Australians and pay higher wages.

The Government has legislated tax cuts for around 3.3 million small and medium Australian businesses employing 6.8 million workers with annual turnover up to $50 million, as part of the Ten Year Enterprise Tax Plan.

The Plan has also increased the unincorporated small business tax discount rate from 5 per cent to 8 per cent (up to a cap of $1,000). This rate will increase to 16 per cent by 2026‒27. By lifting the small business entity turnover threshold from $2 million to $10 million, access has also been extended to a range of small business tax concessions.

These tax cuts began in 2016‒17. Companies with annual turnover less than $10 million had their tax rate cut to 27.5 per cent – the lowest level in over 50 years. This lower corporate tax rate was extended to companies with annual turnover less than $25 million in 2017‒18 and will extend to companies with annual turnover less than $50 million from 1 July 2018.

The Government remains committed to ensuring that Australian businesses remain internationally competitive and will progressively reduce the corporate tax rate for all companies through the Ten Year Enterprise Tax Plan.

Small businesses will also benefit from the Government extending the $20,000 instant asset write–off for a further 12 months to 30 June 2019. These businesses will now have additional opportunities to reinvest in their business and replace or upgrade their assets.

The Government’s investment in essential infrastructure will help build the industries and jobs Australia needs to compete globally

Transport infrastructure to support growth

The Government is living within its means and is no longer borrowing to fund its everyday expenses. Borrowing is instead funding productive investments and long-term infrastructure projects that help grow the economy and create jobs.

This Budget includes $24.5 billion for new nationally significant transport projects and initiatives that benefit people and businesses in every State and Territory, building on existing projects such as the Melbourne to Brisbane Inland Rail project and Western Sydney Airport announced in last year’s Budget.

These form part of the Government’s $75 billion transport infrastructure investment over the next decade.

Boosting innovation with science and research infrastructure

The Government is investing an additional $1.9 billion over 12 years in national research infrastructure to help Australians deliver high impact research that can be used across our economy, from health to manufacturing to agriculture. This brings total Government investment in national research infrastructure through the National Collaborative Research Infrastructure Strategy to $4.1 billion over 12 years.

The Government will also invest $225 million to significantly improve the accuracy and availability of satellite positioning across Australia, enhancing our use of GPS. This new technology will be used to increase productivity across the economy, including in the agriculture, construction and logistics industries.

The Government will provide $41 million to establish a national space agency and grow the Australian space industry. This will help Australian businesses capture more of the US$340 billion a year global space industry.

Building our supercomputing capabilities

The Government is continuing to invest in supercomputing, including upgrading two supercomputers with total funding of $140 million for the Pawsey Supercomputing Centre in Perth and the National Computational Infrastructure facility at the Australian National University.

The Pawsey Supercomputing Centre helps advance medical research, nanotechnology, mining, construction and urban planning with high-speed calculations. It supports research to maximise combustion in supersonic engines and model the physics of extreme waves to capture energy.

Backing small businesses

Supporting small businesses to grow, export and create jobs

Lower taxes to support growth

Lower taxes help Australian businesses to invest, grow and employ more workers as well as pay them more.

The Government has already legislated tax cuts for around 3.3 million small and medium Australian businesses with annual turnover up to $50 million, employing 6.8 million workers, as part of the Ten Year Enterprise Tax Plan. It has increased the unincorporated small business tax discount rate from 5 per cent to 8 per cent (up to a cap of $1,000). This rate will increase to 16 per cent by 2026-27. The small business entity turnover threshold has also been lifted from $2 million to $10 million, which has extended access to a range of small business tax concessions.

The Government remains committed to its fully‑funded Ten Year Enterprise Tax Plan which will lower the company tax rate for all companies to 25 per cent over ten years.

The successful $20,000 instant asset write‑off, first introduced in the 2015‑16 Budget, will be extended for a further 12 months to 30 June 2019. This will improve cash flow for small business, helping them to reinvest in their business and replace or upgrade their assets. Extending this measure means small businesses will have more opportunities to invest and grow.

Cutting red tape

The Government has streamlined GST reporting for around 2.7 million small businesses by reducing the number of BAS GST questions to only three and scrapping the requirement for a 20 question worksheet. This saves small businesses time and money so owners can get back to running their business. When fully implemented, Simpler BAS is estimated to save each small business an average of $590 per year.

Levelling the playing field

The Government is making sure small businesses do not get ripped off by businesses that deliberately go bust to avoid paying their bills with tough new measures to counter illegal phoenixing.

Additional protection has been provided to small businesses by extending unfair contract terms protections, while the new Australian Financial Complaints Authority will ensure that many more small businesses have access to free, fast and binding dispute resolution.

Empowering our businesses to take on the world

Helping small businesses go global

The Government is making it easier for businesses to expand their reach and access overseas markets.

In addition to securing new export opportunities for businesses, the Government is investing $20 million in SME Export Hubs. The Hubs will foster greater cooperation between Australian businesses, helping them grow as they work together to sell their products to the world.

Building capability in the Defence industry sector

The Government’s Defence Industrial Capability Plan is supporting businesses that are building capability in the defence industry sector and across the defence supply chain, including through a $200 billion investment in defence over the next decade. A new Sovereign Industrial Capability Grants Program worth up to $17 million per year will help small businesses in the defence industry buy equipment.

Creating new opportunities for small business

The Government is helping small businesses gain access to capital to turn their great ideas into viable businesses. Crowd‑sourced Equity Funding for public companies is now in place, expanding funding options for start ups and early stage businesses, while the introduction of Open Banking has the potential to unlock more innovative ways for small businesses to access credit and create more competitive banking products for customers.

Prioritising Australian skills

The Government is providing an additional $250 million for the Skilling Australians Fund and will work with the States and Territories to ensure businesses can employ skilled Australians to continue to grow their businesses.

For more information visit the Stronger growth section

Science and technology

Investing in science and technology

Supporting the Australian science and technology sectors

Building research infrastructure

Cheaper goods and services

Better outcomes for consumers

Boosting economic growth

More job opportunities

From Wi‑Fi and the black box flight recorder to the medical application of penicillin, Australians have been responsible for a range of world‑changing inventions.

To stay at the cutting edge and remain internationally competitive in retaining and attracting the best researchers, entrepreneurs and scientists to Australia, the Government is building on the $1.1 billion previously invested through the National Innovation and Science Agenda.

High‑quality infrastructure is critical to Australia’s economic growth and standard of living. It is an essential building block for researchers and businesses working to deliver better goods and services and crucial to maintaining Australia’s competitiveness.

Research infrastructure builds a smarter economy

The Government is investing an additional $1.9 billion in Australia’s national research infrastructure, bringing total investment through the National Collaborative Research Infrastructure Strategy to $4.1 billion over 12 years.

This includes upgrading two supercomputers to help advance medical research, nanotechnology, mining, construction and urban planning with high‑speed calculations. For example, supercomputers support research to maximise combustion in supersonic engines and model the physics of extreme waves to capture energy.

These investments will help Australia remain globally competitive and help Australian businesses develop new products and services, grow industries and employ more people.

Australia’s strong research sector has delivered life‑saving benefits through access to national research infrastructure. This includes the cervical cancer vaccine and a new needle‑free way to deliver vaccines.

Bridging the digital divide

The National Broadband Network will enable all Australians to participate in the digital economy and enjoy the full economic and social benefits made possible by faster internet speeds. The network rollout will be around 75 per cent complete by the end of 2018 and is on track to be completed by 2020.

Better GPS for Australian business

The Government is investing $225 million to improve the accuracy of GPS in Australia. This will improve productivity by allowing business to create new technologies. Growing Australia’s digital economy will also benefit developed sectors including the transport, mining, aviation and construction sectors.

More accurate GPS can improve transport logistics, surveying, agriculture and marine navigation. For example, GPS technology can help logistics companies plan supply movements more efficiently, minimising the time vehicles are left idling between assignments.

New opportunities for Australian industry

Building the industries and jobs Australia needs to compete

The Government is opening up opportunities for Australians to participate in new types of work, create new products and services and access new export markets.

Promoting and growing FinTech

The Australian FinTech sector will be supported through additional funding to promote Australia as a global FinTech leader and the recent signing of the UK‑Australia FinTech Bridge. The Bridge will provide unique opportunities for Australian FinTech firms to grow and expand overseas and will foster closer collaboration between Australia and the UK.

Giving consumer power over their data

The Government will legislate a Consumer Data Right to give Australians greater control over their data.

This will revolutionise the provision of data services by giving Australians the ability to take control of their personal data and share it safely with trusted and accredited service providers.

Banking will be the first industry to adopt the Consumer Data Right, followed by energy and telecommunications, before it is rolled out to other industries economy‑wide. The Consumer Data Right will support the creation of new, more competitive products and services, and create jobs.

Developing Australia’s space industry

The Government will provide $26 million to establish a national space agency to drive investment, create jobs and continue Australia’s participation in the global space economy. A $15 million International Space Investment will provide grants to strategic space projects that generate employment and business opportunities for Australians.

Building Australia’s artificial intelligence capability

The Government is providing $29.9 million to grow Australia’s capabilities in artificial intelligence (AI) and machine learning. Investment in AI offers significant opportunities for Australian businesses to lead the way in the development of products and services with strong export potential, leading to more local jobs.

This funding includes support for planning future investment that improves our expertise and maintains our competitiveness in these technologies through a Technology Roadmap. A new national Ethics Framework and Standards Framework will guide the responsible development of these technologies.

For more information visit the Stronger growth section

Protecting the integrity of the tax system

Action to level the playing field for research and development and digital businesses

Better targeting the Research and Development Tax Incentive

The Government is committed to driving cutting edge research and development in Australia by both supporting small innovative firms and rewarding larger businesses that do more to invest in developing new products, processes and services that help make Australia more competitive and create more jobs.

In response to the findings of the 2016 review of the R&D Tax Incentive (R&DTI), the Government will reform the program, sharpening its focus on additional eligible business R&D while ensuring its ongoing fiscal affordability. This will ensure that generous support can continue to be provided to innovative activities and businesses across Australia.

The integrity and affordability of the R&DTI will also be improved through increased resourcing for administrators, helping ensure that ineligible R&D claims are denied.

Greater transparency around who is claiming the R&DTI will promote public accountability for those benefitting from taxpayer support.

Businesses claiming the R&DTI will benefit from improved guidance material to help them correctly claim for eligible R&D activities.

Levelling the playing field in the digital age

The Government is also committed to ensuring digital businesses pay a fair share of tax in Australia.

This Budget extends the goods and services tax (GST) to Australian hotel bookings made through offshore digital businesses, so they face the same tax treatment as Australian businesses.

The measure complements recent Government actions to extend the GST to imported digital products and services from 1 July 2017, and to low value imported goods from 1 July 2018.

Making multinationals pay their fair share of tax

Income earned in Australia should be taxed in Australia

Taxes in Australia should be competitive and as low as possible, but they must be paid.

To protect our tax base, the Government has created some of the strongest multinational tax laws in the world – including the Multinational Anti-Avoidance Law (MAAL) and the Diverted Profits Tax (DPT).

These rules, together with the Tax Avoidance Taskforce, have been instrumental in ensuring multinationals comply with the law, resulting in the ATO raising $5.2 billion in tax liabilities from large companies since July 2016.

We have strengthened our tax laws so they remain robust and have given the ATO the tools it requires to enforce those rules. Building on the success of the MAAL and the DPT, the Government has introduced further measures to ensure that businesses are paying their fair share of tax.

Tightening the rules on staples

Tightening tax concessions including through stapled structures will ensure that foreign investors pay their fair share of tax. This will allow Australian investors to compete on fairer terms with foreign investors, particularly when investing in land-rich investments.

Further action on multinational tax integrity

Additional Government actions will:

  • Strengthen the thin capitalisation rules that stop companies loading up on debt to shift profits offshore.
  • Bolster Australia’s anti-avoidance rules by broadening the scope of large multinationals being subject to the MAAL and the DPT.

Completed

  • Multinational anti-avoidance law
  • Diverted profits tax
  • Updating transfer pricing rules
  • Increasing penalties on multinationals
  • Establishing a Tax Avoidance Taskforce

Being implemented

  • Better protecting tax whistleblowers
  • Tackling hybrid mismatch arrangements
  • The OECD Multilateral instrument

New measures

  • Tighter rules on stapled structures
  • Improving the integrity of the thin capitalisation rules
  • Broadening the scope of large multinationals being subject to the MAAL and the DPT

Cracking down on the black economy

Targeting organised crime and tax evasion

The Government will combat the harm the black economy is doing to honest individuals, businesses and the Australian community. The black economy is a complex, costly and growing economic and social problem covering a range of issues which detract from the integrity of Australia’s tax system.

In response to the Black Economy Taskforce Final Report, the Government is announcing a comprehensive approach to stamping out the black economy, levelling the playing field for all businesses, and changing perceptions that black economy behaviour is acceptable.

New measures include:

  • increasing the ability of enforcement agencies to detect and disrupt black economy participants.
  • removing the unfair advantage black economy participation gives businesses by removing deductions for non‑compliant payments and changing the Government’s procurement procedures to incentivise tax compliance in supply chains.
  • consulting on reforms to the Australian Business Number (ABN) system to improve the confidence the community has in identifying who they are dealing with, including development of rigorous new identification systems for company directors (DINs).
  • introducing an economy‑wide cash payment limit for large cash transactions of $10,000 to reduce the ability of black economy operators to use cash to avoid their tax and reporting obligations and launder the proceeds of crime.
  • providing additional funding to the Tax Practitioners Board to take action against tax agents that facilitate activity in the black economy.
  • expanding the taxable payments reporting system to contractors in industries with higher identified risks of not reporting their income.

The Government is also creating an Illicit Tobacco Taskforce which will investigate, prosecute and dismantle organised crime groups operating in illicit tobacco. The taxing point of tobacco will also be moved to when it enters Australia to help starve the illegal tobacco market.

These measures will ensure that all Australians receive a ‘fair go’ and that exploitative and illegal behaviour is curtailed.

For more information visit the Overview section

Supporting regional jobs

Ensuring the benefits of our economic growth are shared across the country

Building our regions

Regional Australia employs around one-third of Australia’s workforce. In 2017, jobs growth outside our major cities outpaced regional population growth.

To secure ongoing growth and investment in rural and regional communities, the Government is providing $200 million for a third round of the Building Better Regions Fund, which supports regional infrastructure and community investments. This is in addition to the Regional Growth Fund, which is investing $272 million in larger regional infrastructure projects that support long‑term economic growth and create jobs in regions undergoing structural adjustment.

Construction work on the $9.3 billion Melbourne to Brisbane Inland Rail project will commence this year, supporting 16,000 jobs at the peak of construction.

Growing the forestry industry

The 67,000 Australians currently working in the forest products sector will benefit from the development of a $20 million National Forestry Industry Plan to drive growth in the renewable timber and wood fibre sectors.

Protecting the Reef and tourism jobs

The World Heritage‑listed Great Barrier Reef contributes $6.4 billion to the economy, and supports 64,000 jobs and many small businesses across regional Australia.

The Government is investing more than $500 million to secure the future of the Reef, including by improving water quality, combatting crown‑of‑thorns starfish and conducting scientific research. This investment will safeguard the Reef, support jobs and economic growth and protect one of our international icons.

Supporting Australian film industry jobs

The Government will provide $140 million to attract big budget film productions to Australia. The initiative will support local jobs in the film industry and related industries across the country and secure Australia’s position as one of the world’s leading film production destinations.

Backing our farmers

Improving Australia’s agricultural competitiveness and access to export markets

New export opportunities

Australian farmers are benefiting from the Government’s export trade deals with China, Japan and South Korea. Australia’s total agricultural exports increased by 27 per cent between 2012‑13 and 2016‑17. Farmers will further benefit from the Trans‑Pacific Partnership.

Australia’s expert agricultural trade counsellors in our key export countries help farmers navigate the rules in these markets. Building on this successful initiative from the Agricultural Competitiveness White Paper, this Budget provides $51.3 million to expand our network of agricultural trade counsellors in Asia, Europe and Latin America.

Extending the Indonesia‑Australia Red Meat and Cattle Partnership with $3.6 million over five years will continue to strengthen our beef exports to Indonesia.

Helping farmers remain competitive

This Budget includes $6.3 million to extend funding to give farmers access to a broader range of agricultural and veterinary chemicals. This will ensure continued collaboration between growers, chemical manufacturers and rural research and development corporations.

A further $4.7 million will improve the collection of agricultural labour force data to better understand the skills and labour gaps that farm businesses face.

Better GPS and satellite data to
improve farm performance

$225 million for better GPS technology will enable farmers to access precision agricultural technologies that allow them to more accurately sow seeds in between rows of harvested crops and manage the distribution of water, fertiliser and herbicides. These technologies will help farmers improve productivity and yields, reduce agricultural waste and chemical run‑off and avoid having to overwork the soil.

The Government is also investing $36.9 million to provide greater access to reliable, standardised satellite data that identify physical changes to the Australian environment. This will help Australian agricultural, mining and marine industries improve their efficiency, reduce waste and improve environmental management practices.

The Bureau of Meteorology’s technology platform will be upgraded to ensure farmers can continue to receive the essential weather information they need.

Securing Australia’s valuable biosecurity status

Australia’s world‑leading biosecurity system helps our farmers maintain a competitive advantage in the global marketplace and is critical to protecting Australia’s $48.7 billion in agricultural exports. This Budget provides an additional $102 million for our biosecurity system, which will:

  • strengthen our biosecurity enforcement capacity
  • trial new diagnostic technologies for a seamless border process
  • build our capacity to respond to pest and disease incursions.

The Government is also funding the fight against some of Australia’s most costly and damaging weeds and pests. A $20 million injection will help manage the fruit fly outbreak in northern Tasmania. A further $6.6 million for research and development and key infrastructure will help combat pest animals and weeds.

Securing water infrastructure

The Government is allocating funding to projects to assist farmers by making irrigation systems more efficient, improving water quality and creating jobs.

  • A $140 million grant and $50 million loan for Western Australia’s Myalup‑Wellington project.
  • $176 million towards building the Rookwood Weir in Queensland.
  • $25.3 million for Tasmania’s Scottsdale Irrigation Scheme.
  • $11.6 million for Queensland’s Mareeba Dimbulah Water Supply Scheme.
  • $3 million for Queensland’s Nogoa MacKenzie Water Supply Scheme.
For more information visit the Stronger growth section