500-AusMoneyLast night plans were revealed for the 2014 Federal Budget. Like most occupations, there are a number of key points within the proposal that will have an immediate impact on tradespeople and particularly young apprentices.

To make this information easier to process, Lawrence & Hanson’s Chief Financial Advisor, Steve Drummy, has listed the main points relevant to our customers.

Apprentices:

•       A $5,500 tax free payment available to apprentices under the Tools for Your Trade Initiative to assist with training and tool costs to cease on 1 July 2014

•       From 1 July 2014, eligible apprentices will be able to apply for a new Trade Support Loan up to a maximum of $20,000 over 4 years. The loans will be paid monthly on a sliding scale from the first year of the apprenticeship.  Apprentices who successfully complete their training will be offered a 20 per cent discount on their loans, which will be payable once they are earning the minimum average wage.

Business:

•       Company tax rate cut from 30% to 28.5% from 1 July 2015 (offset by a Paid Parental Leave levy on large companies – 1.5% levy on companies with gross income greater than $5m)

•       FBT rate to increase to 49% for the period 1 April 2015 to 31 March 2017

•       Change to the timing of the increase in the superannuation guarantee rate (9.5% 2014-2018, followed by an annual 0.5% increase until 12.0% in 2022/23)

•       New wage subsidy to encourage businesses to employ people aged over 50 who have been on income support for at least 6 months – $10,000 over 24 months

•       Fuel excise to be indexed from 1 August 2014

•       Medicare Levy to increase from 1.5% to 2.0% from 1 July 2014

•       Temporary Budget Repair levy to commence 1 Jul 2014 and end 30 June 2017 (2% of taxable income in excess of $180k)

You can also find more about how the budget impacts Australian apprentices here:

http://www.smartcompany.com.au/federal-budget-2014/41916-budget-2014-support-for-apprentices-slashed.html