Tax write-off empowers electrician
The extension of tax concessions for SME’s is good news for small business owners such as Adam Banks.
Banks, an electrician, is pleased the instant tax write-off measures introduced last year have been extended.
He says it’s a great incentive that allowed him to buy two new vehicles and extra tools this financial year.
Banks, who set up his Oakford-based business Banks Electrical five years ago and has been forced to cut staff in recent tough times, says he’s pretty happy with the Federal Government overall and the policy.
“It’s worked pretty well for us because I didn’t have to pay the full amount and could get the GST back in the first year,” he says.
|Adam Banks, Banks Electrical
At the peak of the boom, Banks employed eight staff before shutting down the business and travelling for a year, but now uses sub-contractors if there’s more than enough work.
“It’s the way of the times at the moment,” he says. “Five years ago it was the top of the boom so it was busy, and now it’s up and down like a roller-coaster.”
Scott Morrison’s second Budget has seen the $20,000 asset write-off concession extended for a further 12 months to June 2018 after it was introduced in 2015-16.
The concession is also available to more SMEs, with the eligibility extended to businesses with aggregate annual turnover less than $10m—five times higher than the previous turnover threshold.
CCI CEO Deidre Wilmott says the extension will be welcomed by small business.
“This is a good budget for small business who will welcome the extension of the instant asset write-off, which small business in WA has found very useful for making investments into their businesses,” she says.
In other Budget announcements, the Federal Government will also provide $1.5b over four years in a partnership with state governments for apprenticeships and traineeships, with funding to be matched by each state and territory.
The fund will support up to 300,000 apprentices, trainees, pre-apprentices and higher level skilled Australians.
The fund will also ensure businesses employing skilled migrants are also equipping Australians with the skills they need, with employers that sponsor migrants under new temporary skill shortage visa and certain permanent skilled visa arrangements required to pay a levy, which will provide revenue to the fund.
The Federal Government will also encourage states and territories to remove unnecessary barriers to competition and regulations that hold back small businesses through targeted payments under a National Partnership on Regulatory Reform.
The Government will provide $300m over two years to incentivise states and local governments to lessen the regulatory burden on small businesses and remove other restrictions.
Wilmott says CCI looks forward to seeing how the new national partnership rolls out.
“It will be an opportunity for state and local government in Western Australia to look for ways to reduce red tape. Our members will certainly welcome that,” she says.
“It’s good that they are involving local government because that is a particular focus of frustration for our members and as we know Western Australia has more local governments and more legislation that refers law making power to local government and as a result, more local government regulations than any other state in Australia.”
Reductions in corporate tax are still high on the agenda for the Federal Government who are continuing their 10-year Enterprise Tax Plan.
Incorporated small businesses with turnover less than $10m will have their tax rate cut to 27.5 per cent in 2016–17, the lowest level in 50 years.
This lower rate will extend to other companies with annual turnover less than $50m by 2018–19.
The Federal Government is also hoping to boost Australia’s tech industry with a $100m advanced manufacturing funding package.