I wasn’t going to but I thought it would be remiss of me to not cover the Federal Budget handed down 2 weeks ago.
Now that we have had enough time to soak in the changes and additions we can now make a decent analysis.
Small businesses miss out on a promised tax cut but receive a number of other tax concessions as compensation in the Federal Budget. We all had hoped to see the company tax rate from 30 per cent to 29 per cent next financial year as part of the tax reform package involving the new mining tax.
However, Wayne Swan said the move was blocked by the Opposition, forcing the Government to find other ways to help small businesses.
The strongpoint of the budget is a new loss carry-back scheme, allowing businesses to offset a current year tax loss of up to $1 million against tax paid in previous years, worth up to $300,000 per business. Hopefully this leads to businesses being able to invest in new ideas, equipment and markets.
From July 1 all small businesses can also immediately write off every asset they buy for less than $6500, and write off up to $5000 of the cost of cars or utes.
The Government will also spend $27.5 million to extend the Small Business Advisory Service program, for another four years. The program would continue to provide low-cost planning and management advice. Since it was introduced in the 2008-09 Budget, SBAS (the service we deliver at the BEC) has provided over 354,000 separate advisory services to more than 187,000 small businesses around the country.
The Government has also committed to establishing the first Australian Small Business Commissioner which will be a first.
It’s all aimed at improving cash flow which is great. The small business tax incentives were introduced alongside stimulus measures for low-income families, which I’m sure small business owners are hoping will make cautious consumers to spend in the coming year.
Small business benefits briefly:
• Introduction of a loss carry-back program to help businesses return to profitability through a tax benefit of up to $300,000 per year
• Increase in instant asset write-off threshold to $6500
• $225.1 million investment in the Jobs, Education and Training Childcare Fee Assistance program run by Centrelink
• $101 million in new skills measures to improve quality of employees and to support mature age workers
Michael is a business advisor that gives real and modern business advice that encourages thinking different and using strategies that are unique. To date, he has given over 4000+ hours of advisory with business owners.
He was awarded the Best Business Enterprise Centre Mentor/Advisor Australia 2014 and also the youngest person to ever receive the award.
He is a regular contributor to many publications including the national 'Inside Small Business Magazine', Business columnist for 'The Western weekender', 'The Village Voice' and more.