The much-heralded Small Business Package can’t come soon enough for SMEs who have been doing it tough this year, according to the latest ACCI Small Business Survey.
The $20,000 tax break for SMEs got all the headlines and retailers like Harvey Norman, Bunnings and Office Works have been rubbing their expectant hands together, but there were some more goodies in the package.
On top of the instant asset write-off, SMEs who pull in less than $2 million turnover a year, will have their tax rate cut from 30% to 28.5%. This is the lowest in almost half a century. Also sole traders, partnerships and trusts will get a 5% tax discount from July 1 up to $1000 a year.
For more on whether you’re eligible, what you can buy and when, check out our SME tax break checklist. That’s why it’s disappointing that Canberra fluffed their moment and instead kicked the package back and forth for extra political points, particularly taking into account the latest Australian Chamber of Commerce and Industry (ACCI) Small Business Survey.
The results, which gauged the attitudes of more than 2000 Australian businesses, show a tough time for merchants. The survey found that SMEs struggled through difficult trading conditions in the March quarter, with all indicators, except for wages and non-wage labour costs, contracting.
When asked about the year ahead, SME’s expectations for their business declined for the sixth consecutive quarter and expectations for the performance of the economy fell for a fifth consecutive quarter.
Kate Carnell, CEO of the ACCI, said: “Small businesses have endured tough times in recent months, so it was gratifying to see the government offer so much to support for small businesses in the budget.”
“We know they are the engine room of the Australian economy, and the measures will turbocharge small businesses by giving them the confidence to grow, invest and hire new staff.”
She said the initiatives and record-low interest rates should help SMEs “rediscover their mojo”.
ACCI Senior Economist Scott Kompo-Harms said SMEs reported falls in sales revenue, profits, employment, overtime utilisation and investment. “Wages remained steady, while selling prices and non-wage labour costs increased,” he said.
“Looking ahead, there was an increase in SME’s expectations for sales revenue, wages, non-wage labour costs, selling prices, overtime utilisation and investment, but a fall in the outlook for profits and employment.”
Let’s hope the politicians stop the grandstanding and SMEs can get on with doing what they do best, driving the economy.