INVESTMENT FOR A PRODUCTIVE ECONOMY

The Government will continue to reform the tax system to support economic growth by:

• Ensuring that Australia captures a better return for its non-renewable resources through the introduction of a Minerals Resource Rent Tax on iron ore and coal projects
• Extending the Petroleum Resource Rent Tax to onshore oil and gas projects, and the North West Shelf.
• Supporting struggling businesses through a loss carry back arrangement to improve incentives for investment, and encouraging innovation and sensible risk taking.
• Encouraging small business to invest by replacing the Entrepreneurs Tax Offset with simpler and more effective measures.
• Simplifying tax for small businesses and boosting their cash flow, by allowing small businesses to instantly write off each and every business asset costing less than $6,500, and introducing an immediate write-off for the first $5,000 of the cost of a motor vehicle purchased.
• Streamlining tax for small businesses, by providing a single depreciation pool for assets costing $6,500 or more.
• Freeing over one million low income earners from needing to lodge a tax return by increasing the tax free threshold.
• Stimulating infrastructure investment and providing investor certainty, with the introduction of an uplift factor for losses on projects of national significance.
• Supporting research and development through a simplified and timely tax incentive.
• Reforming the fringe benefits tax treatment of cars, to remove the unintended incentive for people to drive their vehicle further than they need to, by introducing a single statutory rate of 20 per cent that applies regardless of kilometres travelled.
• Reducing borrowing costs and encouraging banking competition by reducing the interest withholding tax on offshore borrowings, as well as providing an overall lower withholding tax rate on managed investment trusts.
• Establishing several tax reform processes to deliver the next steps in the reform process that will add to productivity, notably the Business Tax Working Group, a state tax reform plan working with the Council of Australian Federation, and the Not-for-profit Sector Tax Concession Working Group.