6 Things SMEs Need to Know About the Budget
Our ‘Why’ is all about helping small to medium businesses grow into their potential by helping them improve their business, and this is why we are feeling a bit flat this morning after reviewing the budget and finding very little on offer for SMEs.
In saying that, I've put together this summary of our top 6 proposed budget changes we think will be of most interest to SMEs:
- The immediate write-off for assets costing less than $20,000 was due to finish 30 June 2017. This has now been extended to 30 June 2018. So there's is no need to rush through a purchase this year if it's not critical for the business operations.
- After months of speculation, the Government has released a watered down strategy for first home buyers to access superannuation for a deposit. In essence it allows first home buyers to salary sacrifice up to $30,000, accelerating their savings by picking up a marginal tax rate saving.
- There have been some tweaks to the rules around foreign property investment in an attempt to reduce the acceleration of foreign property ownership, including limiting the amount of properties developers can sell to foreign owners and the removal of the principal place of residence exemption.
- There will be the ability for downsizers to contribute up to $300,000 to superannuation from the proceeds of the sale of their home. This represents a significant planning opportunity, especially for people who have exhausted other contribution caps.
- No significant tax rate changes, including leaving alone the reducing company tax rates over the coming years eventually meaning tax rates of 25%. However for individuals there will be a 0.5% increase in the Medicare levy effective 1 July 2019.
- The big bank tax, which is effectively the Government tapping the big 5 on the shoulder asking for a $1.6b share (via a new tax) of their combined $30b in annual profits. I can't help but think this is our Government taking the easy out, with picking on the banks seemingly easier than outsmarting the likes of Google & Apple and ensuring they are paying their fair share on profits made Down Under. In any case, it will interesting to see this play out. I can't see the Banks taking this lying down, which may put upward pressure on cost of debt.
So overall, a Liberal budget that could easily be mistaken for a Labour budget and one that has focused far more on housing affordability and cost of living measures than it has on reducing red tape and paving the way for investments by SMEs.