As the dust settles from Treasurer Scott Morrison’s maiden budget, major business groups have weighed in with their verdict – and overall, it gets the thumbs up.
The Council of Small Business of Australia (COSBOA) says the 2016 Budget continues the good news for small businesses from last year’s Budget.
In particular, COSBOA heralds the Government’s decision to increase the turnover threshold from $2 million to $10 million – meaning more businesses will be able to access the new company tax rate of 27.5% as well as immediate tax deductibility for asset purchases costing less than $20,000 until 30 June 2017.
According to COSBOA, the simplification of the BAS shows a commitment from the government and the ATO to making compliance easier.
“It reflects the fact that the great majority of businesses are honest and transparent in their dealings with government and need less monitoring and better flexibility.”
COSBOA also supports the increase in funding for the Small Business and Family Enterprise Ombudsman (SBFEO), Kate Carnell, from $2 million to $6 million.
“This is important as Ms Carnell develops the role and gathers the information and resources required to aggressively advocate where needed and when needed,” COSBOA said in a statement.
However, COSBOA believes key issue has not been addressed in the budget: reform of the Vocational Education and Training sector.
“To take the greatest advantage of this small business budget and the confidence it will create, we need workers with the right skills, not the skills that make easy money for some greedy RTOs. The unemployed and those workers who want new careers or to increase their earning potential also need the skills necessary to do so.”
The Australian Chamber of Commerce and Industry (ACCI) also supports the Budget’s focus on SMEs.
“The vital role of small and medium enterprises has again been recognised by the Government. Setting the eligibility threshold for access to the $20,000 instant asset write-off and 27.5% company tax rate at $10 million turnover will ensure that these businesses continue to invest and grow,” says James Pearson, CEO of the ACCI.
“The Government has committed to reduce the company tax rate over the next decade and providing benefits for small and medium enterprises, and at the same time providing practical measures to help people become job-ready and give them a path to meaningful work.”
Pearson highlights the path to a company tax rate of 25% by 2026-27 will make Australia a more attractive destination for international investors and will encourage Australians to develop their enterprises at home.
“The improved productivity from these new investments will create more and better paying jobs, ensuring that much of the benefit will flow to households. Unincorporated businesses will also benefit through expanding tax discounts over the next decade.”
The Business Council of Australia (BCA) has described the Budget as “solid” and “responsible”.
BCA chief executive, Jennifer Westcott, believes the Budget is on the right track in terms of steering structural surplus and supporting the economy with long-term jobs and prosperity.
“The best way to boost growth now is giving businesses greater capacity to invest in more productive enterprises, and giving workers a better reward for their effort,” Westcott says.
“By acting now to carefully move towards more competitive business taxes and making inroads on bracket creep on individuals the government has given the economy a much-needed shot in the arm.”
According to Westcott, a Budget that went big on spending and taxes would have been perilous.
“The last thing Australia needed in the current economic circumstances was a big spending and taxing budget that would place our credit rating at risk and jeopardises the capacity to grow the economic pie to underpin the jobs and higher incomes we all want,” Westcott says.
“While the budget highlights that there is still work to be done in coming years to put the nation’s finances onto a sustainable footing for the future, the Government has laid down a solid framework in this Budget for that work to continue.”