Tonight’s budget will announce a package set to help small business to invest, grow and employ more.
In a joint release, Treasurer Joe Hockey and Minister for Small Business, Bruce Billson praised small business as “the engine room of our economy”, whose “innovative and entrepreneurial spirit will drive Australia’s economic future.”
The Government’s Jobs and Small Business package will allow new start-ups, as of July 2016, to be able to immediately deduct professional costs associated with starting a business rather than writing them off over five years.
“Many people need the advice of lawyers and accountants when they start a business. This can be expensive and drag on cash flow. Allowing these costs to be deducted immediately will allow more money to be invested in growing the new business,” Hockey said.
The “fragmented and complex process” of registering a business will also be streamlined with a single online registration site.
Small business owners will also be able to change the legal structure of their business without incurring a CGT liability. This is aimed at reducing some of the complexity of starting a new business and providing business owners with more flexibility to determine how they grow.
Accessing capital will be made easier as part of the package, by removing obstacles to crowd-sourced equity funding. This change compliments the expanded tax concessions for Employee Share Schemes currently before Parliament.
The Government will also consult in the coming months on the current framework that guides the establishment and regulation of corporations. The consultation will investigate whether some of the regulatory requirements can be removed or relaxed to reduce compliance costs and make it easier for small businesses to innovate, grow and create jobs.
The Australian Chamber of Commerce and Industry welcomed the package. Kate Carnell AO, CEO of the ACCI, said: “with more than seven in 10 Australian small businesses unincorporated, it was concerning that they would miss out on the benefit of the 1.5 percentage point cut in company tax for businesses with a turnover of less than $2 million.
“It is encouraging that the government is looking after those 1.7 million unincorporated small businesses, including tradies, sole operators and partnerships, with other support. Making it easier for small businesses to claim tax deductions for their expenses will make it easier for small businesses to invest.
“These deductions are particular powerful when combined with recently announced measures to help new businesses, including allowing new start-ups to immediately deduct professional costs, such as for legal and accounting services, as well as streamlined company registration and removing barriers to crowd-sourced equity funding.
“Small business is the engine room of the Australian economy, so support for these businesses will boost overall jobs and investment. The government’s measures will help to restore confidence among small businesses.”