Accounting software provider MYOB has given the 2016 Federal Budget a near perfect score for its commitment to SMEs, rating it 9 out 10.
“This is the second year in a row where small and medium businesses have been recognised and put front and centre in the budget,” says MYOB CEO Tim Reed.
“I have no doubt they will respond in the way the government hopes – by investing more in innovation and creating high quality jobs.”
However, MYOB believes the Budget could have gone further to assist the sector.
While MYOB supports the company tax rate being reduced to 25% in the future, as well as the increase in the tax discount for unincorporated businesses from 5% to 8%, Reed says SMEs need the changes now – not in 10 years time.
“The plan to cut the company tax rate to 25% is an excellent one however the timeline could and should be shortened,” Reed says. “It’s like SMEs have been given a terrific present but told it is coming in pieces and they can’t open it up for a decade.”
He adds: “MYOB also welcomes the move to widen eligibility for the $20,000 tax write off for small businesses however the Government should consider making this a permanent feature to better support the economy.”
The company also welcomes the Government’s move to simplify Business Activity Statements (BAS). Reed says reducing the ‘G-Codes’ or ‘tags’ from seven to three as part of the trial simplification measures is a welcome step.
“Simplifying GST compliance has been a high priority for businesses for over a decade now so we heartily congratulate the Government for announcing a trial to streamline the process,” Reed says.
“This is something we’ve been lobbying the government about for years, it is great to see this is a government that listens to and responds to requests from small business.”
On the topic of the GST, MYOB highlights business costs could be halved if the GST was revamped to a simpler model, such as in New Zealand.
According to MYOB research, GST compliance costs Australian SMEs more than $13.7 billion a year, or $6,778 a year for each of Australia’s two million SMEs.
“If the Government had the conviction to fully address the GST issue once for all in this Budget, MYOB would have given it a 10/10, but we knew some time ago the government had no appetite to broaden the base of the GST – that is the only way to truly make it simpler for small business owners,” Reed concludes.