Budget 2017: Small Business
What is the government be doing to help small businesses this year?
The federal government is extending the $20000 instant write off tax break for another financial year which allows them to immediately deduct assets that cost less than $20000. The eligibility threshold has also been increased five fold from businesses with a turnover of less than $2 million to $10 millions. This is in line with what the Small Business and Family Enterprise Ombudsman wanted in the budget.
Also of benefit to small businesses is that the government is will cut the corporate tax rate to 25% over the next decade as outlined in the last budget. The Ombudsman made calls to speed up this reduction, but this has not been taken up the the government.
Does the government have any new policies to help small businesses then?
The federal governments stance essentially is that a lot of the remaining issues that are related to small businesses are not their problem. So the government will offer $300 million in inducements to states over the next two years to cut state and territory red tape to reduce the regulatory burden for small businesses. This includes making it easier to do cross state border business but I do have to question who’s role is it to manage cross state affairs, it normally would be the federal government but they seem to be shedding some of their responsibilities to the states in return for money.
Black economy crackdown
Last year the federal government announced that they were cracking down on multinational tax evasion but this year their focus is on the so called black economy, by which they mean any economic activity that runs outside of the formal economy that the government can easily control and tax.
Now, the government says that activities in the black economy results in exploitation and lost revenue and they particularly want to go after businesses in the cleaning and courier industry. Also, the government is cracking down on the manufacturing and use of dodgy sales equipment which may be used to suppress income figures and, in turn, tax revenue. The government is hoping that the black economy measures will boost the budgets bottom line by over $600 million.