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The federal government’s recent Budget has drawn mixed reactions from two of the industry’s leading figures.
FBAA chief executive Peter White applauded the Abbott government’s second Budget, claiming it is a big win for borrowers.
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“Tax breaks for small business will help businesses expand and create jobs, while Treasurer Joe Hockey’s ‘Jobs for Families’ should help ease the burden of the household budget and relieve pressure on mortgage repayments,” he said.
Mr White also commended the government’s decision to retain negative gearing.
“Thousands of Australians would miss out on the benefits of investment property ownership [if it was scrapped], and with cash rates at an all-time low, the climate remains perfect for property purchasing,” he said.
Mortgage Choice chief executive John Flavell agreed with Mr White that the tax breaks and incentives allocated to small businesses will help them grow and flourish.
“It will give small-business owners the opportunity to reinvest in their businesses and take their companies to the next level,” he said.
“And considering small businesses are the engine room of Australia, these tax breaks should spell good news for the broader economy and employment.”
From 1 July this year, small companies with an annual turnover of less than $2 million will have their tax rate lowered from 30 per cent to 28.5 per cent.
In addition, small businesses will be able to claim a tax deduction of up to $20,000 for every item they purchase, and employees of start-ups will get access to tax breaks on shares they receive as part of their pay.
However, Mr Flavell has questioned the effectiveness of the government’s new fee regime for foreign investors.
Under the Budget’s proposed changes, foreign investors will be required to pay an application fee of up to $5,000 to purchase residential properties valued under $1 million.
Those purchasing a property equal to or greater than $1 million would be subject to a fee of up to $10,000, which would increase in increments of up to $10,000 for each additional $1 million in property value.
“While this application fee may be high enough to deter some foreign investors, we do not believe it is high enough to significantly impact the current level of foreign investment activity within Australia,” he said.
[Related: Government threatens brokers in Budget]
