Increasing the threshold for assets that can be instantly written off has topped the wish list for small business ahead of the upcoming Federal Budget, a New South Wales Business Chamber survey of almost 700 businesses has revealed.
The survey is significant for the travel industry because so many travel agencies and tourism operators are small businesses. Similarly, it probably reflects small business feelings across Australia, not just in NSW.
“With the Prime Minister already promising a company tax cut of at least 1.5% by July 2015, we asked our members what other reforms they hope to see in the May budget to increase business competitiveness and kick-start national economic growth,” NSW Business Chamber chief executive, Stephen Cartwright, said.
“According to our survey, the number one priority for small business is for the Federal Government to increase the AUD 1000 threshold which limits the value of assets that can be immediately written off against taxable income.
“Currently, assets valued at more than AUD 1000 must be depreciated over time, which can be a costly and complex constraint on cash flow. Increasing the threshold for assets that can be instantly written off could help kick-start sluggish business investment in the non-mining sector.
“Further cuts to the company tax rate and allowing business losses to be used to offset historical tax liabilities were ranked neck and neck as the next two priorities.
“At the moment, historically successful businesses that have a bad year must wait to deduct their losses from future profits that may never eventuate.
“Introducing loss carry-back would provide an immediate cash injection to many businesses experiencing difficult circumstances, which may enable them to continue to operate and provide jobs for our local communities.
“Incorporated and unincorporated small businesses had slightly different priorities, with incorporated small businesses most in favour of a bigger company tax cut and unincorporated small businesses also supportive of additional advice services.
“Greater support for research and development and increasing the threshold for small business tax concessions were relatively low on the priority list, reflecting the fact that these changes would only affect a limited number of small businesses.
“Australia’s two million small business owners have an important role to play in building a stronger economy and creating new jobs, however the Government must take practical measures to reduce tax burdens and compliance if it is to support this critical growth sector,” Cartwright said.
Edited by Peter Needham