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Federal Budget 2018: Business and innovation

Federal Budget 2018: Business and innovation

Infrastructure, innovation and investment lead the agenda for business in the 2018 Federal Budget.

Leading this year’s Federal Budget agenda for businesses was a focus on improving infrastructure with a view to global competitiveness.

Transport infrastructure developments

As part of the Federal Government’s proposed $75bn transport infrastructure investment over the next 10 years, it proposed $24.5bn in new nationally significant projects.

Regional growth

Growth and investment in rural and regional Australia is expected to benefit with a proposed $200m in additional spending on the third phase of the Building Better Regions Fund.

This follows from the Regional Growth Fund’s $272m investment in larger regional infrastructure projects.

Improving public technology infrastructure

To help boost innovation, the Federal Government is proposing a $2.4bn spend on the nation’s public infrastructure technology, including:

  • $225m to enhance accuracy and availability of satellite positioning to increase productivity in the agriculture, construction and logistics industries
  • $41m earmarked to establish a national space agency to assist Australian businesses capture more of the US$340bn yearly global space market
  • Additional funding for supercomputers and leading research in artificial intelligence

In his speech to Parliament, Treasurer Scott Morrison said: “It’s exciting, setting up our manufacturing, agriculture, transport and service industries for success. They rely on this public infrastructure to do their own research, develop new products and services and run their businesses more efficiently.”

Tax reform already underway

The Federal Government reaffirmed its commitment to lowering taxes for all businesses as part of its 10-Year Enterprise Tax Plan. This follows legislated tax cuts for small and medium sized businesses with up to $50m turnover, due to be introduced 1 July 2018.

Asset write-off extended

The $20,000 instant asset write-off for small businesses with turnover up to $10m was extended for an additional 12 months to 30 June 2019.

Refocusing R&D tax incentives

The Budget proposed a shift in the focus of the Research and Development Tax Incentive (R&DTI) where future reform is expected to support what the Treasurer described as “companies genuinely investing in R&D”.

The Federal Government proposed reforms including:

  • Improve the integrity of the R&DTI, helping ensure ineligible R&D claims are denied
  • Continue to provide support for smaller companies that undertake R&D activities
  • Refocus support for larger companies towards those undertaking additional, higher intensity R&D

Developing Australian skills

To support businesses in accessing a more skilled workforce, the Federal Government is proposing an additional $250m for the Skilling Australians Fund.

Keep in mind 

Any changes outlined in the Federal Budget must be passed by both the House of Representatives, which is controlled by the government, and the Senate, where proposed expenditures are subject to examination within Senate estimates hearings. This means any proposed cuts or changes outlined above may not necessarily become law.

Taxation considerations are general and based on present taxation laws and may be subject to change. You should seek independent, professional tax advice before making any decision based on this information. 

This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. Taxation considerations are general and based on present taxation laws and may be subject to change. You should seek independent, professional tax advice before making any decision based on this information. Commonwealth Bank is also not a registered tax (financial) adviser under the Tax Agent Services Act 2009 and you should seek tax advice from a registered tax agent or a registered tax (financial) adviser if you intend to rely on this information to satisfy the liabilities or obligations or claim entitlements that arise, or could arise, under a taxation law.