Federal Budget 2017: How will it affect your business?
“Small business has a big impact on the Australian economy – with 3.2 million small businesses employing 5.6 million Australians.” - Minister for Small Business, Michael McCormack.

The 2017 Federal Budget focused on a range of initiatives designed to help businesses grow the economy and secure jobs. This Budget built on the range of strong measures introduced in 2015, including extending the instant asset write-off program and introducing incentive payments for cutting red tape.

The Treasurer, Scott Morrison made it clear that small businesses remain a priority for the Government, saying: “Small business owners are the heroes of the economy.”

Meanwhile, the Minister for Small Business, Michael McCormack said: “Small business has a big impact on the Australian economy – with 3.2 million small businesses employing 5.6 million Australians.”

“It’s small business – not Government – which creates jobs and that’s why the Government backs small business,” McCormack said.

 

How the Budget will affect small business

How will the Budget impact your business?

The key budget items relevant to small and medium businesses include:

  • Extension to the $20,000 instant asset tax write-off: The $20,000 instant asset tax write-off will be extended for 12 months to 30 June 2018, and now applies to businesses with a turnover of up to $10 million.
  • $300 million to reduce red tape: State and territory governments will be incentivised to cut red tape and compliance costs for SMEs.
  • $100 million to establish an Advanced Manufacturing Fund: This funding will stimulate manufacturing industries to create jobs, grow businesses and improve productivity.
  • National skills fund to train and support apprentices: The new Skilling Australians Fund will ensure businesses that benefit from employing skilled migrants are also equipping Australians with the skills they need. The Fund will provide an estimated $1.5 billion in the first four years, with spending prioritised towards apprenticeships and traineeships. The only watch-out is that  a levy will be introduced on employers who have foreign workers on their payroll to fund this initiative. Employers will need to pay $3,000 per permanent employee, or $1,200 per temporary visa. 
  • Extension to the crowd-sourced equity framework: The framework, which allows businesses to raise funds through online portals, has been extended to include proprietary companies.

There was also an announcement about increased penalties for companies and individuals that breach consumer law and:

 

Other changes that may impact SMEs

Meanwhile, the big four banks (plus Macquarie) will face a levy of 0.06% on profits of over $6 billion. There is a risk that banks will pass this cost on to their customers, which could affect the cost of banking for small businesses across Australia.

Finally, a commitment was made to invest in more infrastructure programs, including regional programs, which could benefit SMBs across a range of industries.

 

Plans for the future

The Government also unveiled the Ten Year Enterprise Tax Plan. At the heart of the announcement was an immediate tax reduction for companies with an annual turnover of less than $10 million, by lowering their corporate tax to 27.5% from the 2016-17 financial year.

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