BeanScene Magazine

Small businesses celebrate Federal Budget win

From the May 2017 issue.

The 2017-18 federal budget has dealt small businesses a significant win with the popular tax write-off scheme extended for another year.

The extension will enable small to medium businesses with an annual turnover of up to $10 million to immediately deduct eligible assets each costing less than $20,000 for tax purposes.

The scheme has now been extended until 30 June 2018.

The budged recognised the contribution of small business to the Australian economy, with 3.2 million small businesses employing 5.6 million Australians.

“Partnered with our recently-delivered tax cut for small business and extending the definition of small business to benefit more enterprises, this investment continues the Government’s support for small business to pursue new ideas, invest in themselves and create more jobs,” says Small Business Minister Michael McCormack.

Over two years $300 million will also be provided as an incentive to States and Territories to cut red tape and remove other unnecessary regulations and restrictions impeding economic growth and competition.

Restaurant & Catering Australia (R&CA) Association CEO John Hart says the Government’s Budget announcements on 9 May will ensure the ongoing profitability and sustainability of small businesses.

“Over 92 per cent of Australia’s 40,000 restaurants, cafés and catering businesses are small businesses and it is critical that they are given every opportunity to succeed. The Government has acknowledged this in the 2017-18 Budget and we are pleased to see the extension of the instant asset write off program, and $300 million towards cutting red tape,” John says.

The Government also announced the start of a new Skilling Australians Fund. It will provide $1.5 billion over four years to states and territory governments for training, however businesses employing foreign workers on certain skilled visas will be required to pay a levy from March 2018 acting as a contribution to this fund.

“The hospitality sector is currently experiencing a critical skills shortage, with the café, restaurant and takeaway food sector alone requiring an additional 84,300 workers by November 2020," John says. "The Government’s Budget has recognised that there needs to be significant investment in training additional workers to address this skills gap and to mentor apprentices and trainees.”

The 2017-18 budget also included reductions in payroll tax for small businesses as well as funding commitments for Victoria’s tourism and major events bodies.

A further $221 million cut to payroll tax was announced, which includes $48 million from bringing forward payroll tax cuts announced in the previous year’s Budget.

As of 1 July 2017, the payroll tax-free threshold will increase to $625,000 and $650,000 from 1 July 2018.

Businesses in regional Victoria will receive a 25 per cent discount on their payroll tax. The payroll tax rate will decrease to 3.65 per cent for businesses that have at least 85 per cent of their employees residing in regional areas.

The 2017-18 federal budget made headlines with a new round of welfare cuts, additional investment in health and school education, a $6.2 billion bank levy, and a record $75 billion infrastructure spending spree that will last 10 years and include a $20 billion “once in a generation” rail line upgrade.

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