Federal Budget 2018: What it means for Australian small business
The 2018 Federal Budget is focused on helping small businesses of Australia grow as well as better adapt to the changing economy. Although these changes are yet to be finalised, there are a number of proposed expenditures & schemes that could be a positive step forward for Australian small businesses. Let us have a look.
Instant asset write-off extended
Small businesses will now have another 12 months to take full advantage of the federal government’s instant asset write-off scheme. The scheme which was about to expire in this year June will now expire in June 30, 2019. The 12 months extension is going to help small businesses of Australia improve cash flow as well as boost activity and investment for another year. Although small business owners were hoping it would become a permanent fixture of the tax system, the 12 months extension is certainly something to celebrate.
When the scheme was first introduced, it applied to businesses turning over up to $2 million annually. But, this was extended to $10 million in the year 2017 & is going to remain at $10 million for the following year.
Realizing that Australian small businesses are the engine room of the Australian economy, the Federal Government has implemented changes in order to simplify BAS reporting requirements.
The Federal Government has streamlined the GST reporting processes for Australian small businesses. Now instead of the 20 question BAS or Business Activity Statement, small businesses will only have to respond to 3 key questions.
10-Year Enterprise Tax Plan
As part of the Federal Government’s 10-Year Enterprise Plan, the turnover threshold for small as well as medium sized businesses to be eligible for the 27.5% tax rate has now been increased from $25m to $50m which means that now more businesses will be able to benefit from a lower tax rate commencing 1 July 2018.
A greater number of businesses can now access a variety of tax concessions with the small business entity turnover threshold increasing from $2m to $10m.
The Federal Government has also allocated a proposed $17.7m for expanding its Entrepreneurship Facilitators Program. The program, which offers training, mentoring as well as support with a focus on people aged 45 years or more, will be extended into a number of new locations around the country.
Promoting Australian exports
For making it easier for small & medium businesses in Australia to enter, or expand into, offshore markets as well as capture export opportunities, $20m has been allocated for SME Export Hubs.
According to the Federal Government: “The hubs will foster greater co-operation between Australian businesses, helping them grow as they work together to sell their products to the world.”
Protecting small businesses
“The Government is making sure small businesses don’t get ripped off by businesses that deliberately go bust to avoid paying their bills,” said Treasurer Scott Morrison.
For making sure that small businesses in Australia are not exposed to risk because of illegal phoenixing, the Federal Government has proposed improving unfair contract terms protections as well as providing Australian small businesses with access to better dispute resolution mechanisms.