The 2016 budget continues the good news for small business that came from the 2015-16 budget and from other key decisions made between time.
Well done to the Treasurer Scott Morrison and The Small Business Minister and Assistant Treasurer Kelly O’Dwyer, the economy is in now a better position to deal with and take advantage of change.
The big ticket item is that the threshold for determining what is a small business has been raised to $10m. This creates a change immediately for government support actions around tax breaks, instant tax write offs and other initiatives. This gives more businesses access to the $20,000 instant tax write off announced in last year’s budget. There is also another tax decrease for these businesses. This means that tax has decreased 2.5% in 2 years. A good message to send to businesses who want to grow and employ, or start to export and take advantage of the global economy.
The new group of small businesses, those that turn over between $2m and $10m is between 90,000 and 110,00 business. Almost 100% of these businesses employ people. A great majority of these businesses want to grow and employ more people. These are the businesses that will work with smaller micro businesses to innovate and add value; produce and manufacture goods for domestic and global markets.
For definitional purposes we can now say there are 3 million small businesses in Australia.
The simplification of the BAS shows a commitment from the government and the ATO to making compliance easier and reflects the fact that the great majority of businesses are honest and transparent in their dealings with government and need less monitoring and better flexibility.
The other good news is the funding for the Small Business and Family Enterprise Ombudsman (SBFEO), Kate Carnell, has increased from $2m to $6m. This is important as Ms Carnell develops the role and gathers the information and resources required to aggressively advocate where needed and when needed.
It must be noted that this is part of an on-going raft of measures that have been delivered for small businesses. In the last 6 months we have had some important changes. The changes in competition policy, in section 46 of the ACT, when implemented will create more space for innovators to be rewarded for their efforts. The creation of fairness in contracts between small business and bigger businesses will provide the fairness necessary for individual stress management and for proper and honest negotiations and contract contents. The creation of the SBFEO provides the infrastructure and the advocate within the bureaucracy to inform the business community and represent them as necessary. The changes in competition and in contracts cost nothing and the SBFEO is $6m a year.
This budget is written not for small business but for the small business person.
A key issue that has not been addressed in the budget, and hopefully will become a centre piece of election industry policy, is reform of the Vocational Education and Training sector. To take the greatest advantage of this small business budget and the confidence it will create, we need workers with the right skills not the skills that make easy money for some greedy RTOs. The unemployed and those workers who want new careers or to increase their earning potential also need the skills necessary to do so.
The Youth Pathways outlined in the budget go some way to helping focus on our needs and the needs of the unemployed person but more needs to be done in VET. We know that it could not be solved in this budget as the problems in that sector are profound and can not be fixed overnight.
Kelly O’Dwyer has shown the combined role of Small Business Minister and Assistant Treasurer is like home made jam on good quality independent bakery bread – rare and worthwhile for the wait.
More to come.