Well, the dust is certainly beginning to settle after Treasurer Scott Morrison recently announced his latest vision for the economy in the federal government’s 2017 budget. Pollies of all varieties, economists, analysts and business leaders have all had time to digest and examine exactly what this year’s budget means for Australian taxpayers and businesses.
So what does the 2017 budget hold for businesses? The good news is that the government’s economic plan reiterates its belief in the importance of small business to the economy. In his speech the Treasurer said, "small business owners are out there fighting for growth in their businesses every day. They deserve our respect and support." To support small businesses, the Treasurer announced the introduction of a number of measures that have largely been welcomed by the small business community.
$20,000 instant tax write-off extended
One of the most popular announcements was the decision to extend the $20,000 instant tax write-off for another year. Following on from recent legislation that increased the small business entity threshold, businesses with an annual turnover of up to $10 million (extended from $2 million) can take advantage of the instant tax write-off until 30 June 2018. It means more businesses can immediately deduct purchases of eligible assets, which could help many of them grow, innovate and create more jobs.
While some pundits thought the extension didn’t go far enough in terms of the limit and its term, the measure appears to have been widely applauded by business. In fact, the monthly MYOB SME Snapshot survey* conducted after budget night found that 60% of SMEs were pleased to get some financial incentives from this budget.
Crowdsourced equity funding extended
The Treasurer also announced an extension of crowdsourced equity funding to proprietary companies. It means startups and innovation driven small businesses will have easier access to capital through crowdsourced equity funding. The government’s draft legislation is expected to extend this kind of funding to proprietary companies. Better still is the possibility that this funding will become available to a wider range of businesses.
Cutting red tape
Government red tape is the enemy of every business and can slowly strangle it, draining valuable time and resources. To help limit the impact of red tape on small businesses, up to $300 million will be pumped into the states and territories. The funding will see the establishment of the National Partnership on Regulatory Reform (NPRR) that will target unnecessary regulatory barriers and competition. It’s hoped that this measure frees up small business operations and reduces the time and financial costs to small businesses associated with government red tape.
Simpler BAS reporting
In a further effort to minimise administrative burdens placed on small businesses, the government will simplify BAS reporting. Appropriately named, Simpler BAS, it hopes to reduce the amount of bookkeeping and reporting performed by businesses by minimising the GST information required for quarterly BAS statements. From 1 July 2017, small businesses will only need to report GST on sales (1A), GST on purchases (1B) and Total sales (G1), which should make the whole exercise simpler, cheaper and faster.
The banking levy imposed on the big banks also drew the attention of many pundits. While the wider community praised the move to hit the banks with a new tax, two of the Big Four banks countered quickly that any levy would be passed onto customers through increased fees, rates and charges – which could of course impact the cost of banking for businesses.
The 2017 Budget appears to have something for everyone. Overall, there are some tangible positives for business and it appears to have been well received by many business owners.
The MYOB SME Snapshot* survey suggested that just 16% of business owners viewed the budget negatively. If you’re still unsure what the impact will be for your business, feel free to chat with your accountant or business adviser.