Pro-business Budget will stimulate growth for small businesses
With the fed gov proposing tax benefits to stimulate SME growth in the new budget, there is no better time than now to get funding for your small business. Capify makes business funding simple. You can have funds in your account within 48 hours for any business purpose.
Independent financial analysts generally agree that the 2018 Federal Budget is essentially good for small and medium businesses.
Immediate value for SME
In the short-term, the three most powerful levers the government is using to help business are:
- Extension of the instant write-off for eligible assets costing less than $20,000. This is a positive measure to help businesses purchase assets that can fuel growth and has been extended for another 12 months to the 30th of June 2019.
- Personal tax cuts. The Commonwealth Government presented this initiative with the headline: “Lower taxes to support growth”. Using a demand-driven model, the extra cash flowing into households is expected to convert into stronger consumer spending. With $140 billion in income tax cuts over the next decade, this could be a major boost for businesses exposed to consumer sentiment.
- More small businesses will be eligible for various small business tax concessions. Often overlooked but of vital importance for SMEs is the fact that the small business entity turnover threshold is being lifted from $2 million to $10 million.
Long-term Infrastructure and growth
Another positive in Scott Morrison’s third budget is the investment in infrastructure, which totals $24.5 billion in new projects. This coupled with an allocation of $3.5 billion for roads will create employment, with a subsequent flow on effect to consumer confidence to keep cash registers ringing. In the weaker States, this government spending is critical to their economies.
The Commonwealth Bank says the Budget will help small businesses adapt to a changing economy and “make it easier to focus on growing their business.”
The ABC reports: “With the Government sticking to its 10-year plan to reduce company taxes for all businesses from 30 to 25 percent — a plan currently stalled in the Senate — its budget measures for business are split between boosts and burdens.
“Given that it is not splashing extra cash on the business sector, the Government is seeking to reward those businesses investing in new equipment or research and technology, while punishing those seeking to minimise their tax.”
It’s a shame to see that the research and development tax incentive scheme will be overhauled to save $2.4 billion but the government argues that this is being taken from companies that are rorting the system.
Other strategies that should have SMEs cheering include:
- $17.7m to expand its Entrepreneurship Facilitators Program
- $20m for SME Export Hubs
The bottom line is that the Federal Government’s revenues have been increasing and it is in a strong position to use this extra revenue to fund growth initiatives for business.
Find the full Federal Budget here.
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