Federal Budget 2017-18

Feb 10, 2017 | Business

Scott Morrison handed down his Federal Budget for 2017-18 last night. He believes the budget will secure better days ahead and uses the catch cries of Fairness, Opportunity and Security. According to the Treasurer we have choices to make and he believes the budget is a fair and responsible way back into surplus (year 2020/21). Many commentators have called it a “very labor budget”, “reset or reboot budget”, “buries the 2014 budget” which destroyed the Liberals and is a budget based on the “political reality of dealing with the senate”. As you would expect Chris Bowen Labor Shadow Treasurer, the greens and independents were not overly happy with the budget, with Chris Bowen calling it a “desperate, failed attempt at a catchup budget.”

The budget ultimately was a big spend on infrastructure, Health care, more pain for foreign investors, additional money for ATO and ACCC and a nice tax ($6.2b) on the 5 big banks in Australia (4 majors plus Macquarie).

The key big things missing from the budget was any real tax reform, however, we got a fair bit of that last year through the enterprise tax cuts which have only just been passed thanks to Nick Xenaphon, CGT discount changes and negative gearing changes.

Key Items from the budget are:

Personal tax/Investing

  • Increase in medicare levy of 0.5% from 1/7/19 to help fund the shortfall in NDIS
  • Lapsing of 2% budget deficit levy for those earning over $180,000pa
  • Restriction on claim travel expenses for property investors from 1/7/17
  • Removing the availability of claiming depreciation deductions on P & E on purchase of property (ie Quantity Surveyors reports) from 9/5/17
  • New tax incentives for affordable housing through MIT and an increase in the CGT discount to 60% for certain housing


  • An extension of the $20,000 immediate tax write-offs for small business (now <$10m turnover) until 30 June 2018
  • Tightening access to small business concessions from 1/7/17
  • Extension of Taxable Reporting Regime to contractors in the courier and cleaning industries from 1/7/18


  • Foreign tax residents and temporary tax residents will not be able to gain access to the main residence exemption on sale of a house in Australia
  • Foreign withholding tax regime has been expanded for sales of residential property by non residents by reducing the threshold to $750,000 properties and increasing the withholding tax rate to 12.5%
  • Investments to new property development will mean that the developers will be limited to selling less than 50% of the properties to non residents
  • Annual levy on vacant property held by non residents (at least $5,000)


  • Ability for any person if they are downsizing their home to put a max of $300,000 into super which will not be counted towards any contribution limits (be careful that you don’t lose your aged pension as a result)
  • Use of direct contributions into super for first home owners up to a max of $30,000 ($15,000pa) and then being able to withdraw it to buy the house
  • Inclusion of the borrowed amounts in your pension transfer balance cap for instalment warrants
  • Tightening of non arm’s length transactions for smsf


  • $20b funding for national rail program including Geelong to Waurn Ponds line, Snowy Mountains Hydro Scheme, Brisbane rail link, new Western Sydney airport and study on a rail link for the Tullamarine Airport.


  • Full funding of NDIS
  • Lifting the freeze on medicare
  • Increased hospital funding
  • Increased spending on mental health funding and research

Related insights

Four ways a business accountant can help you with EOFY

Four ways a business accountant can help you with EOFY

The end of financial year (EOFY) can be a particularly busy time for business owners, as tax time tasks are added to your usual schedule. Hiring the assistance of a business accountant for EOFY can help to ensure that you maximise your potential at tax time while...

read more
Must-do Tips to Prepare Your Business for Tax Season 

Must-do Tips to Prepare Your Business for Tax Season 

End of financial year is fast approaching, and now is an ideal time to get organised ahead of the busy tax season. Your business can avoid any unnecessary stress or setbacks this EOFY by being prepared in advance by following a few simple steps.  1/ Review your...

read more
Federal Budget 2024-25: What you need to know

Federal Budget 2024-25: What you need to know

Treasurer Jim Chalmers handed down the 2024-25 Federal Budget last night, forecasting a surplus of $9.3 billion this financial year. This is the second year in a row the Albanese Government has delivered a surplus, but forward estimates show double-digit deficits for...

read more

Subscribe for the latest news + updates

Get in touch to explore your opportunities with an LBW expert and discover your journey to a better financial future.