Small business package will encourage more business starts and existing business to invest
BUT it has missed the opportunity to scrap obscure taxes and arduous reporting and has added complexity
Big taxing, big spending budget leaves hard work to be done in future years
Small business will react strongly and positively to the $20,000 immediate asset write-off announced in tonight’s budget, according to MYOB CEO Tim Reed. MYOB has over 1 million SME businesses in Australia.
“There’s no doubt there are changes built in to benefit small business. This is the first budget in 10 years that has put small businesses where they belong – at the front and centre of government policy. The government has two weapons at its disposal – to reduce the taxes small businesses pay and to make it easier to run a business.
“The government has done outstanding work on the first, but unfortunately running a small business will still involve long, frustrating nights for owners as the additional reporting and red tape kicks in. We’d now like to see more work to make it simpler to run a business.” said Mr Reed.
Mr Reed provided the following commentary on Budget measures:
“The 1.5% cut to company tax for small business (and equivalent concessions for non-incorporated businesses) is good as it will encourage more people to start a business but does so by adding complexity to an already confusing system. We’d prefer to see a lower, across the board, company tax rate.
“We’re giving two thumbs up to changes to employee shares schemes. It gives innovators “permission to play” by making it easier to attract great talent. Importantly, this levels the playing field between Australia and other countries when it comes to having great talent join the team when starting a business,” said Mr Reed.
“The $20,000 accelerated/increased depreciation allowance for small business is simply great news for people who want to back themselves. This move will stimulate small business investment, bring forward planned hires and drive an increase in productivity.
“However we’re concerned about how changes to GST entry thresholds will be implemented. This attempt to simplify could mean businesses are moving in and out of different classifications, which can get very complicated in terms of reporting.
“SMEs will welcome additional infrastructure investment. The fact is that SMEs live in their local economy – they are the last leg in the delivery chain. Most are burdened by creaking transport infrastructure, wasting valuable time sitting in traffic. Improvements to our transport system will be welcomed by the sector.
Missed opportunities to help small business
“The Government has missed an opportunity to lop a particularly nasty piece of red tape – the requirement for coding GST-free transactions into one of eight categories. If we took a simpler approach, as they do in New Zealand, it would more than halve the time it takes small business to complete GST reporting, and slash the $13.7 billion time cost to business that we estimate.
“We’d question whether this was opportunity to scrap some of the many obscure Federal taxes to create an environment more attractive and conducive to doing business. SMEs are saying ‘bring it on’ when it comes to tax reform, and we’re right there with them.
“If our small business sector is to flourish, we can’t shy away from taxation reform. With the taxation review well underway, the government needs to lead the way in creating a simpler, more effective taxation system. The current system is stifling business and must change.
“We’re hopeful consumers respond well to this budget and keep spending. The small business sector relies on the discretionary section of the customer wallet. If consumer confidence falls, they’ll still pay the mortgage and the bills, but reign in discretionary spend. We are worried, however, that this budget is a big taxing, big spending budget – which means in time more work will need to be done to reign in both spending and taxes.
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For further comment or other information please contact:
Sarah Beyrath, MYOB PR and Corporate Affairs Manager
M: +61 427 223 841 / E: Sarah.Beyrath@myob.com
Louise Halloran, Ogilvy PR
P: 02 8437 5397 / M: +61 407 044 727 / E: email@example.com
Established in 1991, MYOB is Australia’s leading accounting software provider. It makes life easier for approx. 1.2 million businesses across Australia and New Zealand by simplifying accounting, payroll, tax, CRM, websites, job costing, practice management, inventory, mobile payments and more. MYOB also provides ongoing client support via many channels including a network of over 40,000 accountants, bookkeepers and other consultants. It is committed to ongoing innovation, particularly in cloud computing solutions, and spends more than AU$35 million annually on research and development. For more information, visit myob.com.au.