Key Announcements in the 2016-17 Budget
The big news this week is the delivery of Treasurer Scott Morrison’s first Budget. You would have no doubt already heard the slogan about ‘Jobs and Growth’ many times.
But what does it mean for road transport businesses?
The ATA has produced a fact sheet for the information of members so you can consider the relevant detail for yourself. Read on below.
- Company tax rate for small businesses with a turnover of less than $10 million per year to fall to 27.5 per cent from 1 July 2016
- Unincorporated small businesses with a turnover of less than $5 million per year to receive an 8 per cent tax discount
- Many small business tax concessions to be extended to businesses with a turnover of less than $10 million (up from $2 million)
- Fuel tax credit rate for eligible trucks to increase from 13.36 cents per litre to 13.6 cents per litre from 1 July 2016
|Total business investment
|Exports of goods and services
|Imports of goods and services
|Real gross domestic product
|Unemployment rate (per cent)
|Consumer price index
The Budget forecasts the Australian economy will grow by 2½ per cent in 2016-17, before increasing to 3 per cent in 2017-18 as the drag on economic growth caused by falling mining investment eases.
Mining investment is expected to fall 25½ per cent in 2016-17 and 14 per cent in 2017-18, as existing projects are completed.
Non-mining investment is expected to increase 3½ per cent in 2016-17 and 4½ per cent in 2017-18, although Treasury concedes that its recovery has been slower than expected. This is a key uncertainty in Australia’s economic outlook, and highlights the importance of the Government’s budget measures to encourage greater investment by small businesses.
Household spending is expected to increase 3 per cent in 2016-17 and 3 per cent in 2017-18, underpinned by low interest rates and a decline in the amount of money that households are saving, rather than spending.
The growth in housing investment is forecast to tail off in 2016-17 (2 per cent growth) and 2017-18 (1 per cent growth), after growing very strongly in 2014-15 and 2015-16. The decline in the growth of housing construction is due to the expected completion of a record number of medium-high density dwellings.
Total exports are forecast to increase by 5 per cent in 2016-17 and 5½ per cent in 2017-18. These forecasts are lower than they were last December, because of a forecast higher exchange rate (which makes Australian exports more expensive) and the weakening outlook for base metals.
Imports are forecast to grow 2½ per cent in 2016-17 and 3 per cent in 2017-18, with zero growth expected in 2015-16. These low growth figures reflect the wind down in capital imports for the mining sector. Other imports can be expected to grow in line with the broader economy.
The unemployment rate, which was 5.7 per cent in seasonally adjusted terms in March, is expected to decrease slightly to 5½ per cent in 2016-17 and 2017-18. The expected decline in the unemployment rate is due to strong employment growth in labour intensive parts of the economy like education, health and retail trade.
Key budget announcements for trucking businesses
Business tax cuts
From 1 July 2016, the Government will reduce the company tax rate for small businesses with a turnover of less than $10 million per year to 27.5 per cent.
The Government will also extend the unincorporated small business tax discount.
From 1 July 2016, the discount will be available to businesses with an annual turnover of less than $5 million (up from $2 million) and will be increased to 8 per cent. The discount will continue to be capped at $1,000 per individual per year.
Small business tax concessions
The turnover threshold for a number of small business tax concessions will be increased from $2 million to $10 million. From 1 July 2016, these businesses will have access to:
- simplified depreciation rules, including immediate tax deductibility for asset purchases costing less than $20,000 until 30 June 2017
- a simplified method of paying PAYG instalments calculated by the ATO
- the option of accounting for GST on a cash basis and paying GST instalments as calculated by the ATO
- other tax concessions currently available to small businesses, such as simplified trading stock rules and FBT exemptions (from 1 April 2017).
The threshold change will not affect eligibility for the small business capital gains tax concessions, which will continue to be restricted to businesses with annual turnover of less than $2 million or that satisfy the maximum net asset value test.
Road user charge and fuel tax credits
The road user charge will fall from 26.14 to 25.9 cents per litre from 1 July 2016.
As a result, the fuel tax credit rate for eligible trucks will increase from 13.36 cents per litre to 13.6 cents per litre.
Transfer of former RSRT spending to the NHVR
The Budget confirms that the Government will transfer $15.6 million over four years from the former RSRT to the NHVR for practical safety measures.
The Government has committed $920 million per year from 2019-20 to extend the following infrastructure programs:
- Roads to Recovery ($400 million per year)
- Black Spots ($60 million per year)
- Heavy Vehicle Safety and Productivity ($40 million)
- Bridges Renewal ($60 million)
- National Network Maintenance ($350 million)
- Research and evaluation ($10 million)
A detailed breakdown showing the key projects that the Government will fund in each state in 2016-17 is available [PDF, 126 KB]
The Australian Trucking Association has prepared this fact sheet with due care, but our understanding of the Budget measures may change as more information becomes available. In addition, many Budget measures need to be passed by Parliament. The fact sheet is intended for general information only and may not apply to your business circumstances. You should get advice from your accountant or tax agent before acting on the information in this fact sheet.
Minister Chester consults Industry Leaders on safety priorities
This week, the ALRTA attended a roundtable of industry leaders hosted by the Federal Minister for Infrastructure and Transport, the Hon Darren Chester MP, to discuss priorities for improving safety in the heavy vehicle sector.
The meeting follows the recent abolition of the Road Safety Remuneration System and the allocation of an additional $3.9m annually over four years to the NHVR.
ATA members met earlier in the day with NHVR senior management to discuss the organisation’s current safety program and how the additional money might be used to fast-track or expand initiatives.
The ALRTA is supportive of the Minister’s proposal to expand the NSW and SA camera network into VIC and QLD and for NHVR to lead the integration of the system to make it more useful for tracking long distance heavy vehicles. A national registration system is also required to make the best use of the technology.
The ALRTA has also proposed that some of the available funding is directed towards a national education program for drivers of light vehicles. More than 80% of fatal multi-vehicle accidents that involve a truck are actually caused by a light vehicle (i.e. the truck driver is not at fault). There is huge potential for the Federal Government to help reduce the incidence of fatal accidents by educating light vehicle drivers about how to share the road safely with larger vehicles.
Other areas of interest for industry include fast tracking the development of industry codes of practice; enhancing chain of responsibility laws and more rapid roll out of roadworthiness reforms including a move to risk-based vehicle inspections.
ALRTA Responds to NTC reform proposals
Over the past two weeks the ALRTA has made formal written submissions to the NTC on a proposal to reform the HVNL to enhance executive officer liability, as well as proposals to improve the productivity of heavy vehicles with additional axles including: twin steer & tri drive prime movers and trailer quad axles groups.
We have supported an option to make the scope and construct of executive officer liability consistent throughout the law. Essentially, we would like to see the recent changes agreed for the chain of responsibility provisions apply similarly in other parts of the law. There is no need to either increase or decrease the number of offences that attract executive officer liability – it is really just a matter of consistency to reduce the potential for confusion about the legal standards that apply.
ALRTA is supportive of increasing the mass allowable for combinations that include additional axles. The total mass for the combination needs to reflect the mass allowable over the sum of the individual axle groups. The current rules discourage operators from using innovative vehicle types because the extra weight of more axles just increases the tare mass without also increasing the allowable payload.
New National Network for PBS Truck and Dogs
The NHVR has released Australia’s first gazette Notice for PBS truck and dog combinations.
The Notice will replace the need for state based permits for heavy vehicle combinations comprising of a three or four-axle truck, towing a three, four or five-axle dog trailer.
The NHVR estimates that the notice will replace around 1,500 permits annually. This is great news for operators who use combinations under the notice.
The NHVR has also released a new National Class 1 Special Purpose Vehicle Notice covering heavy vehicles such as cranes and concrete pumps. This will replace around 4,000 permits annually.
Together, these notices are a welcome development for all operators who use the permit system. The removal of 5,500 permits from the access system should help free up resources so that other applications can be looked at more quickly.
For more information see the National class 2 PBS level 1 and 2A truck and dog trailer authorisation notice 2016 (no.1) (PDF, 711KB) and the supporting Information sheet – National class 2 PBS level 1 and 2A truck and dog trailer authorisation notice 2016 (PDF, 798KB)
Tell us about your problems with the HVNL
The HVNL is a very large and complex Act. It is also relatively new, having replaced 13 separate pieces of legislation only a few years ago.
It is quite normal that such a large Act will contain some drafting errors, internal inconsistencies and other problems where the law unintentionally causes practical problems for transport operators.
For this reason the NTC keeps a HVNL Maintenance Group in operation to identify and fix minor problems. The Maintenance Group is about to launch into a new round of investigation.
In the past, the process has helped fix things like technical requirements to carry unnecessary paperwork. ALRTA is already aware of some issues with the size and positioning of vehicle signage.
If you have experienced any problems in the practical application of the HVNL, or you have some ideas on how it could be improved, please let us know so we can seek a resolution on your behalf.
LRTAQ Conference: Longreach 19-22 MAY 2016
There is still time to register for the upcoming LRTAQ Conference at Longreach, QLD, 19-22 May 2016. The conference program also incorporates the LRTAQ AGM and legendary Bull Carter’s Ball.
While you are in Longreach you can check out the Stockman’s Hall of Fame, Qantas Founders Museum, Cobb and Co and Powerhouse Museum.
To register click here: http://lrtaq.com.au/