The words “budget night” don’t exactly fill small businesses with excitement. Yet that’s where we are again, with just under a month to go until Canberra opens its coffers. Or, you know, closes them. Depending on who you are.
It’s so hard to remember what happens from one budget year to the next. Apart from the fact that 12 months is a long time, plenty of Budget initiatives don’t even pass Parliament the year they’re announced. Or at all.
So…what exactly happened last year? Good question. Let’s take a look back and see what was announced, versus what actually ended up happening.
Ah yes, corporate tax cuts. Last year the Government didn’t exactly make any new initiatives, but it did say it would keep its commitment to drop the corporate tax rate to 25 percent for all businesses.
You might remember that just before the Budget last year, the Senate passed tax cuts for businesses with turnover lower than $10 million to 27.5 percent. That figure will drop to 25 percent by 2026-27.
Not a lot, really. The Government still hasn’t managed to pass any major tax cuts for bigger business and it’s facing a lot of political pressure against them. Will they include them in this year’s Budget? Smart money’s on “yes”, but who knows?
Small businesses rejoiced when the Government announced the $20,000 instant asset write-off would be extended for another year. This was a pretty big win, and no one really had a problem with it.
Well, that’s the question. Currently the write-off is in place as long as you can purchase and install equipment by June 30, 2018. But beyond that? The current plans are that the write-off will end, so businesses are hoping next month’s Budget will include an extension…or make the $20,000 instant asset write-off a permanent benefit.
The Government earmarked $300 million to help states and territories make compliance easier. The only problem was that it didn’t really outline a lot of the different initiatives that this money would fund…
Not a lot? It’s hard to say. The Budget last year said the $300 million would go towards creating a National Partnership on Regulatory Reform, but so far there hasn’t been a lot of news around that.
It could be the money is going to separate, discrete initiatives across state levels. But there isn’t anything concrete about this. Let’s hope this year’s budget contains some more distinct, detailed plans for regulatory reform.
The Government confirmed support for businesses to use a simplified GST reporting system, meaning you only have to fill out two or three fields instead of several.
This in place! It’s not total reform, sure, but it’ll save you time every quarter. And that’s better than a kick in the pants.
The courier and cleaning industries were forced to join a mandatory reporting system last year. The Budget announced the change, with the reporting to start from July 1, 2018.
This is still going ahead, and there’s been no change to that plan. It’s worth pointing out though, that many in the business community thought this was an overreach and that these two particular industries were being unfairly punished. Will this year’s Budget contain a rollback?
Maybe. Maybe not. We’ll have to see.
Who knows, really. But all the buzz seems to be focusing on a few key things. Here’s what we think we might see:
• More news about corporate taxes, no matter what direction. Larger businesses may get an accelerated timetable.
• Personal tax cuts, although these will probably be pretty small
• An extension of the instant asset write-off. It’s a popular program and doesn’t cost too much.
From now until the budget you’ll start to see leaks to press outlets (referred to as ‘drops’) on individual measures in the budget to get people clued into what’s coming up.
For example, just this morning the government said it would tip in $5 billion into the building of a rail link between Melbourne airport and the CBD.
But apart from individual announcements like this, we’re not holding our breath.
The last two budgets have been generous for small business, and there’s a sneaky suspicion that higher tax receipts could mean an earlier return to surplus. So small businesses may not see as many goodies as they have in the past.
But in the end, who knows?
Answer: us. We will, on Tuesday, May 8.
That’s when we’ll be posting our Federal Budget coverage live.
So hit us up here, or on our social channels and follow along with us for all the Budget news that will affect Australian business.