Small business owners largely emerged as winners in the 2017 Federal Budget – with a number of new measures aimed at SMEs.
On 9 May 2017, the Federal Budget was handed down – with the Government proposing some key incentives aimed at boosting small business in Australia.
But, while most of the reforms set out in the 2017 Budget are positive for small business owners, it’s important to remember that all these proposals need to pass through Parliament before they become law.
Here’s what you need to know about the potential changes – and what they could mean for your business.
Getting a helping hand from the government
If you’re a small business owner who is making the most of the $20,000 tax write off for eligible assets (like computer equipment, machinery and vehicles), there’s some great news out of this year’s Budget.
While this measure was due to end on 30 June this year, the Government is proposing an extension for another 12 months. This gives you an even greater opportunity to invest in assets of up to $20,000 each and claim a tax deduction on the full value of every asset in the next financial year.
Even better, the Government aims to raise the threshold to $10 million in annual turnover so more businesses can take advantage of this instant tax offset. If your business wasn’t previously eligible, you’ll have until 30 June 2018 to make a tax saving on new assets worth $20,000 or more – as long as this proposal is legislated.
Cutting through the red tape
Love running your own business but tired of running up against the red tape? The Government has created the new National Partnership on Regulatory Reform to provide some relief for small business owners.
Under this partnership, the Government is offering to give states and territories up to $300 million in exchange for their efforts to reduce red tape for small businesses. While it isn’t clear what areas will be targeted, simplification of procedures and removal of duplication in regulations and administration requirements are likely to be on the agenda. This incentive may help you decrease your operating costs – so you’ll have more time and resources to focus on growing your business.
New costs for employing foreign workers
A major talking point in the lead up to the Budget was the Government’s replacement of the previous 457 visa system with a new Temporary Skills Shortage visa, as part of their bid to create more jobs for Australian workers.
In the 2017 Budget, the Government has proposed an annual foreign worker levy for employers – set to come into effect in March 2018. If this levy passes into law, it means businesses with less than $10 million turnover will have to pay $1,200 for each year they employ a foreign worker on a temporary visa, and a one-off fee of $3,000 for employees with a permanent skilled visa.
The amount raised from this levy will go into the new Skilling Australians Fund – which will provide apprenticeships to train local workers in occupations that currently rely on skilled migrants.
So, if your business employs skilled foreign workers, the proposed levy may push up your annual employment costs – and have a significant impact on your business cash flow.