On Tuesday night, the Federal Treasurer (the Hon. Scott Morrison) tabled the 2017/18 Budget in the Australian Parliament.
Continuing its commitment to small business in Australia, the Treasurer announced that the Australian Government would continue to allow small businesses (with annual revenue of $10M or less) to write off asset expenditure of up to $20,000 for a further year.
The announcement comes on top of recently legislated tax cuts for small businesses which will see the company tax rate of 30% lowered to 27.5% for businesses with an annual turnover of $10M.
“This is the third year in a row that the Australian Government has delivered tax cuts and/or instant depreciation benefits for small businesses in Australia demonstrating tangible support for small business such as family-owned fuel retail businesses, said ACAPMA CEO Mark McKenzie.
“We encourage all fuel retailers with turnovers of less than $10M to contact their accountant to discuss how best to take advantage of the instant asset write-offs before 30 June 2017 – and for the financial year ahead”, said Mark.
While the support for small business continues a theme of recent past years, the 2017/18 Budget differs markedly from that of past years in two key areas.
First, the budget makes provision for $70B in spending on national transport infrastructure (road, rail and airports) as well as supporting growth in regional communities via the allocation of $472M to the Regional Growth Fund and establishing a new Regional Investment Corporation.“The increased commitment to improving national transport infrastructure and supporting regional growth is very welcome”, said Mark.“It is our hope that these initiatives will support the renewal of regional Australia with benefits delivered to regional households and regional businesses alike”, added Mark.
Second, the Budget contains some very welcome and positive commentary of the near-term outlook for the Australian economy.
In recent past years, politicians and economic commentators have tended to talk down the Australian economy. This is despite assessments completed by global organisations such as the World Bank and the OECD singling out Australia for many years of successive economic growth (albeit smaller in recent years) when many other advanced economies have either stalled or gone backwards.
It is suggested that this commentary has created considered uncertainty for households and businesses alike, largely contributing to a negative consumer sentiment in Australia.
When consumers are pessimistic about the future, they stop buying – instead focussing on the paying down of debt which is often a responsible thing to do. But continued pessimistic talk, when the fundamentals of the economy are essentially sound, makes no sense at all and effectively constrains consumer spending and business growth.
“The commentary surrounding this budget is very welcome as it is much more optimistic than past budgets, with the government leading by example through expansionary spending on infrastructure, regional communities, education and health”, said Mark.
“Sure, there will be some economic commentators who will choose to see our economy as ‘half empty’ instead of ‘half full’ – that is their choice, said Mark. “But we choose to see the Australian economy as being half-full”, said Mark.
“ACAPMA congratulates Federal Small Business Minister (the Hon. Michael McCormack) and the Turnbull Government for bringing down a pragmatic and positive budget – one that we believe will contribute to a near term improvement in consumer confidence and business growth”, concluded Mark.
Further information about the tax cuts and instant asset expenditure write up for small businesses with annual revenue of up to $10M can be found by visiting http://budget.gov.au/2016-17/content/glossies/tax_super/html/tax_super-04.htm