The federal government will make it easier and cheaper for entrepreneurs to start a new business in next week’s budget, as part of what Small Business Minister Bruce Billson has labelled the “the most substantial small business package this country has seen”.
Speaking to SmartCompany this morning, Billson revealed details of a number of budget measures designed to support entrepreneurs and early-stage businesses, which he says will be appreciated by the small business community but may get lost in the “broader budget debate”.
While the government has already flagged tax relief for small businesses in next week’s budget, along with the potential re-instatement of accelerated depreciation measures, Billson announced today it will also “streamline the business registration process” by creating a single website for new business owners to register their businesses using “one key identifier”, says Billson.
The change is expected to save new businesses around $13.7 million in compliance costs each year.
Billson has also revealed plans to change the way professional costs associated with establishing a new business can be depreciated.
“Something that people may not realise has been a concern for some time is these professional costs depreciate over five years,” Billson says.
The change will mean costs associated with obtaining professional business advice, legal fees and fees paid to the Australian Securities and Investments Commission will be able to be depreciated by the business immediately.
Some of the costs associated with setting up crowdsourced equity funding will also fall into this category.
Billson says the government has been working since November to make it easier for businesses to raise equity via crowdfunding and will provide additional funding to ASIC to support this in the budget.
The Small Business Minister says he is also considering ways to dispel the hesitation of some entrepreneurs to consider incorporating their business.
“We have heard too often that for many, the costs and complexity and compliance burden for small proprietary companies is excessive and not justified in the eyes of some small business enterprises,” Billson says.
“We will take the reforms that the Howard government introduced in 2003 and see if there is scope to take them further to lift the regulatory burden.”
Billson says “businesses in transition” will also benefit from next week’s budget, which will include a measure to eliminate some of the “risks” associated with changing the legal structure of their business, including the imposition of capital gains tax.
“You might start out your small business with a structure as a sole trader and it might suit you at that time, but if you find success … the evolution and growth of your business may be better supported by a new entity structure for your enterprise,” Billson says.
Billson says the measure will only apply to businesses that change legal structures once after formation and the government is “not anticipating or seeking to accommodate a sort of flip-floppery” between different business structures.
“That would not be in anyone’s interest,” he says.
Billson declined to reveal the cost of the government’s small business package, saying those details will be revealed next Tuesday, but said small business will be at the heart of the Coalition’s second budget.
“It is about recognising future jobs and economic growth and income generation to support future living standards will come from energising enterprises,” he says.
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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