With the budget announced last week, here are what we believe are 6 top budget measures to assist our amazing small business community move from surviving to thriving beyond 2020.
Before going on though, did you know that we small businesses employ 2 of every 3 Australian workers and make up 99% of the economy? Something to be very proud of we reckon!
So, moving on to the budget:
- Immediate tax write offs: When you buy or finance any equipment of any value (no cap on the price) from October 6, 2020 to June 30,2022 you can write off the entire cost of it in that financial year….. That means not only do you benefit from using new technology and income generating assets, but your tax bill is reduced.
- Loss carry back: Any loss your business incurrs up to June 30 2022, you can offset it against profits made in the past (from 2018-19). That means that you can request a tax refund and boost your cashflow.
- JobMaker Hiring Credit: If you employ young workers aged between 18 and 30, the government will pay you $200 a week and $100 a week for those employees aged 30 to 35, for a twelve month period.
- Changes to responsible lending laws: Small businesses have been the unintended sufferer of lending laws that should have been applied to consumers only, not small businesses. This has led to good businesses with good loan repayment history struggling to either a) get approved for finance and/or b) pay higher interest rates with 2nd and 3rd tier lenders. Not fair, we say! The government claims they will relax these new laws as of March 2021. Let’s hope it translates to the banks peeling back some irrelevant credit policy.
- Personal income tax cuts bought forward and backdated to July 2020: So, if you earn up to $45,000 the new reduced tax rate is 19% and 32.5% for those earning up to $120,000.
- Investment in research into future climate disasters: Many of us know someone who was affected by this years catastrophic bushfires. Ecolease has a number of small business customers severely impacted by the fires and it is investment into this type of research that in the long run benefits the SME community. Buried in this year’s budget was the provision of $7.6 million to upgrade the Australian Community Climate and Earth System Simulator, known as ACCESS, to increase the nation’s “capacity to respond to future climate disasters and emergencies”.