Well, all the signs were that the Federal Government would focus on small business and they certainly delivered! I was extremely pleased with the immediate $20,000 asset write-off announced in tonight’s budget, but also with a series of the other announcements.
There’s no doubt that this is a budget for small business. In fact, I think it 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 three options to help small business tonight: 1) to reduce the taxes small businesses pay and encourage investment, 2) to show small business that they appreciate the critical role they play in our community, and 3) finally to make it easier to run a business.
I give them a high grade on the first two, unfortunately not much was done on the third.
With regard to encouraging investment the instant asset write off and the small business tax reduction are a great result. I’ve heard criticism that this might mean small business spend more money on goods imported from overseas. This is a naïve criticism – what we want and need from this is small businesses to invest to improve productivity – I’m confident this measure will hit the target.
With regard to showing support for small business and encouraging entrepreneurialism there are some great measures. When starting a business the greatest need is for money and skills. The changes to crowd-funded equity and employee share schemes are great initiatives in this area.
With regard to my third wish, making it easier to run a business, there was some good work to remove FBT from some business tools (particularly hand-held digital devices) but there is a lot more to be done here … especially to simplify the GST. I’ll save more for a future blog on this but movement here would hit the trifecta for me!
The government has not made changes to existing superannuation compliance obligations. This means small businesses need to take action to keep software updated and compliant, enabling them to realise productivity benefits. Features like SuperStream will ultimately make their reporting obligation less arduous.
Looking beyond the specific small business measures I have a few other thoughts:
The changes in the Federal Budget will affect every business on July 1. Subscribing or upgrading your MYOB software will ensure your business is always compliant with tax changes, including the government’s new SuperStream system for paying super contributions.