Federal budget 2013: A sector-by-sector guide

The small business community escaped last night’s 2013-14 budget unscathed by Treasurer Wayne Swan’s cuts, but there is still plenty of pain in other areas.

Big businesses have copped a huge crackdown on tax loopholes, and the ATO has received new funds in order to target the misuse of trusts.

It’s a tough year for the government – usually an election year would come alongside spending initiatives for businesses and families alike.

But with an $18 billion deficit, Swan can’t afford to be generous. Here are the biggest winners and losers from this year’s budget:

Winners

The disabled

The government has two major spending initiatives in this year’s budget, and care for the disabled is one of them. The National Disability Insurance Scheme will receive $14.3 billion.

Education

The government will pledge $10 billion for the Gonski education reforms. Along with the disability spending, these two initiatives form the two biggest major spending initiatives.

Higher education will also receive $97 million for Commonwealth-supported university places.

However, there have been some cuts here – pre-payment discounts and bonuses for paying off university debts have now been scrapped.

Infrastructure

The federal government will pay out $3 billion to various infrastructure projects across the country, which will no doubt flow through to various small businesses in the construction and engineering industries.

Senior citizens

Seniors will receive $127 million with $112 million to support anyone downsizing a home, $9.9 million for broadband support and $4.6 million for an ageing policy institute.

Health

Another $226 million for cancer initiatives, including breast cancer screening, $18.5 million for prostate cancer research and more money for bone-marrow transplants.

Losers

Anyone using a trust

The ATO has received another $67 million in order to crack down on the misuse of trusts, especially the trusts used by wealthy taxpayers. Additionally, large trusts will now have to pay PAYG on a monthly basis.

Multinational companies

The government has closed several loopholes relating to large businesses, including multinational businesses, such as thin capitalisation rules and practices regarding “dividend washing”.

Families

Families and individual taxpayers, who are usually the recipients of more generous payments during an election year, have been targeted for some savings.

The Baby Bonus has been scrapped and in its place an increased amount for Family Tax Benefit A payments.

Tax cuts relating to the carbon tax have also been delayed. Altogether these changes will save the government more than $4 billion.

The resources sector

The resources sector has suffered a hit with the removal of a deduction which benefited businesses buying exploration companies. Now, businesses will only be able to claim the deduction for genuine exploration.

Prime Minister Julia Gillard said on Sky News this morning said the deduction was being misused by companies who had no genuine interest in exploration.

The move is expected to raise $1.1 billion.