The release of Australia's 2015-16 Federal Budget is an opportunity to address a number of important decisions which need to be made for Australia's future prosperity and to tackle our growing fiscal deficit.
The 2015-16 Budget is a pragmatic response to the fiscal challenges Australia is facing and balances some of the measures posed in last year’s Budget. It includes a number of measures designed to lift productivity and drive growth by encouraging workforce participation and supporting small business.
Key Budget insights include:
- Small businesses and start-ups will benefit through the reduced corporate tax rate and being able to immediately deduct professional costs associated with starting a business. However, there are concerns that if the two tiered corporate tax system is maintained over the longer term there is a risk that it could stymie growth as companies try to avoid the threshold that tips them into the higher tax bracket.
- The budget aims to encourage more women to either re-enter the workforce or remain in the workforce through a $7 billion childcare package. Encouraging more women with young children back into the workforce, not only improves participation but also helps improve the gender diversity of our workforce, which in turn creates diversity of thought and outcomes.
Whilst this Budget starts to move Australia in the right direction, more needs to be done to ensure the trajectory is sustainable and prevent a ballooning debt problem for the next generation.