On Tuesday 3 May 2016, the Federal Treasurer, the Hon. Scott Morrison delivered the 2016 Budget.

The 2016 Budget comes ‘hot on the heels’ of the Turnbull Government having recently come to the aid of the fuel haul industry – and indeed the wider transport industry – by abolishing the Road Safety Remuneration Tribunal, just as it was considering the development of an unnecessary industrial order governing the transport of fuel, oil and gas.

As with last years’ Federal Budget, the 2016 Budget included a package of measures designed to support the growth of small business in Australia. Specifically, these measures included:

  • increasing the small business definition to annual turnover less than $10 million to extend access to a range of small business tax concessions
  • lowering the company tax rate even further to 27.5 per cent for small businesses with turnover less than $10 million from 1 July 2016 (a lower tax rate than the current 28.5 per cent company tax rate for small businesses with turnover less than $2 million)
  • an 8 per cent unincorporated small business tax discount from 1 July 2016 for small businesses with a turnover less than $5 million, up to $1,000
  • extending access to the $20,000 instant asset write off from 1 July 2016 for businesses with annual turnover of less than $10 million
  • simplifying BAS for small businesses with turnover less than $10 million, reducing reporting labels from seven to three, with a trial beginning 1 July 2016
  • additional wage subsidies to benefit both job seekers and businesses, including as part of our Youth Jobs PaTH (Prepare-Trial-Hire) Programme.
  • encouraging entrepreneurship and innovation by supporting young people who wish to start their own business.

Of most relevance to fuel retailers, the determination of the $10M annual earnings threshold for eligibility actually excludes consideration of revenue earned from annual fuel sales.

This means that a fuel retail business with a total annual turnover of $18M, where fuel revenue totals $14M and Convenience Store (and other business revenue) totals $4M, would be deemed to be earning $4M only – and would therefore be entitled to access all of the benefits listed above.

“The Federal Budget provides strong recognition of the role of small business in building a stronger national economy and the continued accommodation of the special nature of fuel retail businesses where much of the revenue amounts to tax collected for the government is not retained by the business, is a very welcome one”, said ACAPMA CEO Mark McKenzie.

The budget will deliver immediate benefits to fuel businesses and members are encouraged to contact their accountants to discuss how to best take advantage of the new concessions that have been provided.

“This is the second year in a row that the government has sought to support small business and we are very grateful to both Treasurer Morrison and Federal Small Business Minister, the Hon. Kelly O’Dwyer”, said Mark.

“The measures will allow small business to continue to grow and innovate, providing security for the large number of people employed by small fuel retailing businesses across Australia”, said Mark.

Further details of the small business measures contained in the 2016 Federal Budget can be found at: http://kmo.ministers.treasury.gov.au/media-release/052-2016/.