The Liberal Party of Australia has taken the victory of the Federal Election. What does this mean for small businesses? A huge pain point for small business owners is the struggle to maintain a work-life balance due to pressures of the $20 billion red-tape burden.
They also have no time to handle all admin tasks like the complicated GST/BAS reporting process. Other problems facing small businesses include tax relief, unfair contracts, competition and access to finance.
What does the Liberal party plan to do to help small businesses?
Let’s take a quick look at all the initiatives they promise to put in place:
Instant asset write-off
The ATO has increased the threshold to $30,000, which has been extended to 30 June 2020. It includes businesses with a turnover of $10 million to less than $50 million. The Coalition Government promises to back this by introducing legislation to extend it until 30 June 2020.
Tax cuts down to 27.5 per cent for small to medium size businesses turning over less than $50 million per year. They aim to further reduce this to 25 per cent by the 2021/22 financial year. This makes it available for around 220,000 more Australian businesses.
Increase the current eight per cent Small Business Income Tax offset ($1000) to 16 per cent for unincorporated businesses with a turnover of less than $5 million.
Combat the Black Economy through a $1billion pledge toward the ATO for 4 years to aid the Tax Avoidance Taskforce, targeting business’ who fall outside of the small business benchmarks, operate through cash only and/or have not lodged their taxes and deliberately operate outside the system. The aim of this is to give small businesses operating within the system a level playing field.
Help cash flow by forcing the Government to pay its bills within 20 days for contracts up to 1 million. This will apply to large businesses that seek government contracts as well.
Better access to finance
Implement a $2 billion Australian Business Securitisation Fund to help give small business owners better access to finance. The Coalition is pledging $100mil in funding to establish the fund and to also partner with financial institutions to provide equity funding to small businesses.
Change competition laws in an effort to stop market power abuse by big businesses and take action against illegal phoenix activity.
In addition, they want to introduce unfair contract legislation and make dispute resolution more efficient through the new Australian Financial Complaints Authority.
They want to build on already-established trade agreements to help small businesses gain access to export opportunities.
Create more job opportunities through a $525 million Delivering Skills for today and Tomorrow package, which will give small businesses the opportunity to take on more apprentices in areas of skill shortage. This initiative is intended to strengthen the Vocational Education and Training System.
Small business is the backbone of our economy. They make up 97 per cent of the 2.1 million active trading businesses in Australia. We hope that the Liberal Party will support and stick by SMEs.