Federal Budget 2018 – what’s in it for you?
Tyro CEO Robbie Cooke comments
The Federal Budget often provides us with an insight into where the focus lies for our Government and our economy. This week we were encouraged to see the Treasurer, the Hon. Scott Morrison MP, highlight the importance of the small business community and the role it plays in producing more jobs and helping grow our overall economy.
You can read the Treasurer’s full speech here.
At Tyro, we understand more than most that small-to-medium sized businesses (SMEs) are the backbone of our Australian economy. As an SME your contribution to the economy accounts for a whopping 33 per cent of Australia’s GDP. SMEs employ over 40 per cent of Australia’s workforce, and they contribute around 12 per cent of total company tax revenue.
For this reason, we believe it is critically important SMEs are front and centre of business policy making in Australia.
The Treasurer’s comments around SMEs were backed up by action, with a number of SME-friendly initiatives announced in this year’s Budget. We’ve outlined a few of the 2018-19 highlights below, with links to the relevant Government department for further information.
2018 Budget Announcements for SMEs
- A further 12-month extension until June 2019 of the existing $20,000 instant tax write-off for significant infrastructure investment. This allows small business to write-off purchases up to $20,000 instantly for tax purposes. This will improve cash flow for small business, helping them to reinvest in their business and replace or upgrade their assets.
- A $40 million fund to assist Australian SMEs to expand overseas and export to global markets.
- The maintenance of the previously-announced tax cuts for SMEs. Last year’s budget introduced an SME corporate tax rate cut to 27.5 per cent for 2016-17, down from 30 per cent if turnover is up to $10 million, and from 28.5 per cent if turnover is less than $2 million. This rate is scheduled to drop to 27 per cent by 2024-25, and to 25 per cent by 2026-27. Unincorporated businesses with a turnover of up to $5 million will see their tax discount increasing from 5 per cent to 8 percent for 2016-17, on the way to a 13 per cent discount in the 2025-26 financial year. More details here.
- The Skilling Australians Fund was boosted by an additional $250 million to help people with growing businesses develop support skills. This level of funding is of great importance at this time as disrupted markets and global competition are making life more challenging for many businesses. You can tap into that by contacting the Skilling Australians Fund.
Tyro is a champion of SMEs – with their interests at its core – and we understand that cash flow remains one of their greatest challenges. Beyond the budget measures, one area of policymaking we would like to see addressed in the coming year is the payment terms between SMEs and big business. This is something that has been partially addressed by Government around its own payment terms for SMEs: in late 2017, the Government announced its decision to pay invoices in 20 days to help small businesses improve their cash flow. We would like to see this policy and appropriate penalties now extended to big business, as it has overseas, and we will be calling for further action in this area.
What do you think of the 2018-19 Budget? Did we miss anything? What would you like to see for SMEs? We’d love to hear your point of view.