Ah the federal budget – that unapologetic and mind numbingly dense edict that will change the way you live and do business – either dramatically, or more than likely, in a marginal manner. It may sound less than exciting but really, this is good stuff when someone pulls out all the gold – which we will do for you next week!
When it comes to small business in Australia the yearly budget can be quite significant as taxation systems, stimulus packages, schemes and various incentives come and go in a fashion that creates significant change to a small business operating on small amounts of capital.
While past budgets are a good indicator of what’s to come, really it’s a crapshoot until the dice actually come to rest and reveal themselves. Still, let’s emulate Nostradamus for a moment and make some reasonable predictions as to how this could play out and what that could mean.
Small business speaks
In our recent poll of 1250 small Australian businesses we got some insight into what this sector wants from the government. Here’s to hoping the Federal Budget allows a modicum of relief and we see some of these fears allayed. Some are more general rather than purely budget related but here we see what our small businesses want from government.
- Worryingly, one in three (33 per cent) indicate that government policies will be the factor that affects them the most.
- The top three solutions our respondents want from the government are better tax offsets (53 per cent); improved internet connectivity to support them in building an omni-channel presence (32 per cent); and more start-up incentives (26 per cent).
- More than 70 per cent say the government isn’t doing enough to protect them from the e-commerce behemoth Amazon and wish to see regulating legislation.
- 33 per cent of small businesses admit that it is tough to set up shop here, citing the lack of government support and technology infrastructure as key barriers to success.
The $20,000 question
This will be a big one – the much appreciated and highly popular incentive for small business asset write offs could be in limbo. The instant asset tax write off is a much lauded scheme which allows businesses turning over up to $10 million the opportunity to instantly depreciate and write off assets up to $20, 000. This can include computers, work vehicles or other depreciating work related assets. Currently the scheme only runs until June 30, 2018. Will it be extended? With its popularity we are certainly hoping so, with many signs pointing to it being likely. So either cross your fingers or get moving now to take advantage while you can.
Last year the Government tagged $3oo million in funds to tackle small business compliance in an effort to reduce red tape and make compliance easier. How? We don’t frankly know. It has been named the National Partnership on Regulatory Reform (gee it sounds promising). But in reality there has been precious little detail on this one and there are high hopes that the 2018 budget will have some more specifics around this, whether it will be distributed among state based initiatives etc. is still a matter of the unknown.
What happened to that company tax cut?
We may well see a solid cut in the upper levels of business, but this will likely have no effect yet on small business. Last year we saw re commitment form the Turnbull Government on the promised goal of reducing all company tax to 25% by 2026 (after a tax cut for businesses under $10 million revenue last year). So in light of that its unlikely to see much in terms of tax cuts for the small business owners among us.
Join us next week here sand on our social channels to see a full rundown on what is delivered after Tuesday May 8th budget announcement.