At the risk of becoming part of the budget reporting landscape, this media release from the Minister for Small Business makes interesting reading. Note that small business, rather than entrepreneurship is the ‘engine room’ of the Australian economy.
The Gillard Government will deliver a range of tax reforms and extend advice services to benefit Australia’s 2.7 million small businesses – the engine room of our economy.
As part of the 2012-13 Budget, the Government will provide $27.5 million to extend the highly successful Small Business Advisory Service (SBAS) program for a further four years to continue supporting small businesses with vital advice and assistance.
The Government will also introduce a loss carry back initiative in 2012-13 to provide tax relief to companies struggling due to the high dollar.
“Small business owners with good access to information, advice, knowledge and experience are more likely to grow their business and create jobs,” Minister for Small Business, Brendan O’Connor, said.
“The Australian economy is undergoing a significant transformation and many small businesses are under pressure.
“Currently, small companies which are making losses are unable to use those losses to reduce tax liability because they are not making enough profit to incur a tax liability.
“The introduction of the loss carry-back will allow businesses to also ‘carry back’ their losses, to offset past profits and get a refund of tax previously paid on that profit.
“In doing so, this reform will mean businesses can use their tax losses now – when they need to – rather than in the future when their businesses are performing better.”
The new loss carry-back is estimated to benefit around 110,000 companies in its first four years, of which its estimated around 90 per cent will be small businesses.
This important tax reform is in addition to other tax relief starting on 1 July for small businesses that will benefit companies as well as sole traders, partnerships and trusts.
“From 1 July, small businesses will be able to immediately deduct the cost of any new business asset costing less than $6,500, for as many assets as they purchase,” Minister O’Connor said.
“In addition, businesses will be able to write off assets costing $6,500 or more in a single pool (15 per cent in the year they are purchased, 30 per cent each subsequent year).
“We also recognise that for many small businesses their biggest asset is their car, ute or van.
“Small businesses will be able to also instantly write-off the first $5,000 of the cost of a new or used motor vehicle, from 1 July this year.
“This important measure builds on the Gillard Government’s strong record of management of the economy in the interests of working Australians and spreading opportunity right across the community.”
Mr O’Connor said the extension of the Small Business Advisory Service (SBAS) will help small business operators as well as those starting out with low-cost planning, management advice and assistance with applications for finance.
“Since it was introduced in the 2008-09 Budget, SBAS has provided over 354,000 separate advisory services to more than 187,000 small businesses around the country,” Mr O’Connor said.
“More than 90 per cent of users surveyed said they would recommend the service to other small businesses.”
Service providers will be invited to make submissions for future funding rounds, with applications assessed through a competitive, merit-based process. Funding for SBAS was due to end on June 30, 2012.
Under the funding announced in this Budget, the program will be funded on an ongoing basis.
The Gillard Government is also establishing the first Australian Small Business Commissioner who will be a point of contact for small business services and information.
Small business owners will also have access to the National Workforce Development Fund which supports training and workforce development in areas of current and future skills need.” (Statement Ends)