If last year’s budget was built upon the “biggest small business package in our nation’s history”, then the 2016 budget could be seen as the next episode in the Coalition’s love for small business.
The 2016 budget once again puts small business front and centre, with ongoing tax cuts, incentives to hire young workers and interns, extra funding for the Small Business and Family Enterprise Ombudsman and moves to reform complicated tax regulations.
But the small business community says this year’s budget is “more than a sequel” as it also directs some well-needed focus to the middle market; those medium size businesses that continue to grow and employ more Australians.
Popular incentives from last year’s budget, such as the $20,000 instant asset write-off, have been extended so that businesses turning over up to $10 million a year are eligible.
The tax discount for unincorporated businesses has been increased, from 5% to 8%, and the threshold lifted to $5 million.
“It builds on everything they did last year,” says Peter Strong, chief executive of the Council of Small Business of Australia.
That’s not to say there won’t be individuals and businesses that miss out or are worse off from this year’s budget.
While the government says it has a plan to introduce more flexibility into the superannuation system to benefit low-income workers and those who’ve taken time out of the workforce, it is also putting restrictions on how much high-net worth individuals can contribute to their super.
Aged care providers have lost $1.2 billion for the provision of complex healthcare and there is concern in the agriculture sector over the decision to keep the controversial backpacker tax.
But Malcolm Turnbull and Scott Morrison appear to have resisted the temptation to splash cash around as this year’s election looms closer by the day.
The temptation would be great as the government seeks to shore up its level of support.
Turnbull is expected to pay a visit to the Governor General within days to call a double dissolution, with an election likely to be held on July 2.
While this year’s budget may have made only modest changes, if the Coalition is re-elected this year, it will have been given a mandate to pursue more significant reform.
Where that will leave small and medium businesses remains to be seen.
Editor
Eloise is an experienced business journalist and editor, who has held senior editorial roles at SmartCompany since 2014. Prior to joining SmartCompany, Eloise was news editor at Books+Publishing, the trade press for the Australian book industry. Eloise has degrees in media and communications, marketing and business management, and political science. You can follow her on LinkedIn, and Twitter at @ellykeating.
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