Commenting on last night’s Federal Budget, Australian Small Business and Family Enterprise Ombudsman (ASBFEO) Kate Carnell said measures outlined in the Federal Budget will give more than three million small-to-medium sized enterprises (SMEs) in Australia, the confidence to invest their time and money in the long-term future of their business.
“For SMEs, certainty and the ability to confidently plan for your future is the key to success. The measures in the Federal Budget provide businesses with a framework to chart a way forward, and confidently make investments – in terms of money, staff, equipment and time – to grow their business.”
Ms Carnell said the reduction in the small business company tax rate to 27.5 per cent and increasing the eligibility threshold to $10 million means tens-of-thousands more SMEs are now in a better position to grow. “For more than 800,000 SMEs, these measures translate into two tax cuts in as many years, while a further 60,000 will see an instant tax reduction of 2.5 per cent.”
“For SMEs, tax savings don’t go in their back pocket. Instead, mum and dad business owners reinvest this money into their enterprise; they buy more equipment, they hire more staff, and as big businesses continue to down-size and out-source, it’s the SMEs that are creating the new jobs, especially for the younger generation.”
By lifting the eligibility threshold for unincorporated businesses to qualify for the increased 8 per cent tax discount, Ms Carnell said the Budget will help encourage more people to have a go at starting their own business in Australia.
“It’s about getting the risk and reward balance right; about incentivising entrepreneurial people to generate opportunities not just for themselves, but for their community, and the Budget’s tax measures certainly go a long way towards achieving this, with around 2.3 million businesses eligible for the unincorporated tax discount.”
She also said raising the threshold for the instant asset write-off for all small businesses will ensure that from 1 July 2016, an additional 100,000 business owners can confidently purchase or upgrade assets that will allow them to grow and to innovate well into the future.
“Businesses were quick to capitalise on this measure when it was announced in last year’s Budget, with more than 170,000 small businesses making claims since July 1, 2015, totalling almost $800 million; this has stimulated the sector and accelerated growth, which has obviously benefited the broader economy.”
$6 million in funding was set aside in last night’s Budget for the ASBFEO. “The funding is in recognition of the vital role this office can play in making a positive contribution to the SME landscape in Australia,” said Ms Carnell. “It means we have the capacity to fully engage with the sector, conduct a thorough and comprehensive consultation process and in turn, ensure that the issues and ideas raised with us translate into meaningful policy outcomes.”