The small business sector has historically been seen as the driver of the economy for Coalition Governments. Unfortunately, there is little in the way of incentive for private business in this MYEFO. We outline below the introduction of concessional loans for small business that have been subject to natural disaster, the repeal of the instant asset write-off and changes to the Small Business Superannuation Clearing House.
Small Business instant asset write-off
In response to the repeal of the Carbon Tax, the associated benefits surrounding the small business instant asset write-off threshold will also be reverted. The Labor Government first announced the increase of the instant write-off threshold from $1,000 to $5,000 for small business in the 2010-11Federal Budget. From 1 January 2014, the instant asset write-off threshold will revert back to $1,000, producing a gain to revenue of $2.3 billion over the forward estimates period.
In addition the Government will also remove the $5,000 accelerated depreciation of motor vehicles purchases, providing a gain to revenue of $450 million over the forward estimates period.
Small business & primary producer concessional loans
The Government will introduce concessional loans of up to $100,000 to small businesses, primary producers, and voluntary not-for-profit organisation who are experiencing a loss of income due to a natural disaster. Applicants do not necessarily need to have been physically affected by a natural disaster to apply for the concessional loan.
The concessional loans will be available on terms that are in line with concessional loans currently being provided under the Natural Disaster Relief and Recovery Arrangements.
Superannuation compliance costs
The Government will deliver its election promise and transfer the Small Business Superannuation Clearing House to the Australian Taxation Office (ATO) from April 2014 in an act to reduce red tape surrounding superannuation for small businesses. This will allow for small businesses to easily meet their superannuation obligations through their regular interaction with the ATO. The Government will further investigate on possible options to ease the superannuation compliance on small businesses through an extensive consultation process.
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