The Budget has announced it will cut the corporate tax rate by 1.5 per cent for small businesses with an annual turnover less than $2 million.

For small business, this will also incur additional R&D benefit, where the permanent tax benefit will increase from 15 to 16.5 per cent.

Small businesses will still be able to cash out the 45 per cent refundable tax offset, where there are existing sufficient tax losses. The increased R&D benefit aligns with recent government policy to shift innovation funding away from large companies to small businesses.

The refundable offset is especially attractive to start-ups in pre-revenue phase as they can continue to cash out R&D spend instead of building up their tax losses.

Other incentives 

The Government has permitted grant programs to continue supporting manufacturing transition and commercialisation, however some programs may receive reductions in total funding.

Funding of $6.1 million has been allocated to expand the operation of the Climate Change Authority for another two years, including an additional $100 million to the Great Barrier Reef Trust.

Farmers who have been battling drought and require help with managing pests will receive $25.8 million in funding.