A much needed boost for small businesses

 David Koch

The importance of small businesses to the health of the Australian economy has been recognised in the 2009-2010 Australian Federal Budget, with a number of initiatives to support this important part of the economy announced across numerous ministerial portfolios.

In Federal Treasurer Wayne Swan’s words “small businesses are the backbone of the Australian economy, employing around half of all private sector workers.”

Tax break
The key initiative for small businesses is an increase to the Small Business and General Business Tax Break for eligible assets bought between December 2008 and December 2009. Businesses will be able to claim a 50 percent tax deduction for qualifying assets, on top of the normal tax deduction related to the asset.

An eligible asset is any tangible asset that costs more than $1,000. This provision applies to companies with an annual turnover of $2 million or less.

For a small business on a tax rate of 30 percent, this will mean a 15 percent reduction in the price of the asset. So if you buy a $2,000 laptop between now and the end of the year, this initiative will save you $300.

CGT relief
Small businesses will also receive capital gains tax relief as part of this year’s budget. The government has announced it is making changes to the small business CGT concession provisions so that they operate more flexibly. Further details on this measure are expected to be announced in coming months.

e-commerce initiative
Another key initiative announced in this year’s budget is the new Small Business Online Program. Under the program the federal government will provide $10 million over two years to help small businesses take advantage of e business opportunities and expand their online presence. Funds will be directed to businesses that consult to small organisations on e business issues.

New support line
Funding was also allocated in this year’s budget to a new Small Business Support Line to be set up by the Department of Innovation, Industry and Research. The service has been put in place to help small businesses affected by the global financial crisis. Small business owners can access support on issues to do with obtaining finance, cash flow management, retail leasing, promotion and marketing and personal counselling through the service.

Workplace relations support for SMBs
The Department of Workplace Relations will also receive $14.3 million over two years to support the introduction of the new workplace relations system. Much of this funding will be directed to groups that run education services to help small businesses understand the new workplace relations laws, especially provisions about collective bargaining and the Small Business Fair Dismissal Code.

Many of the other initiatives announced in the budget will also have a flow-on effect to small businesses. For example, some of the $22 billion in infrastructure funding will go to the many small building contractors that will work as sub contractors for larger building companies on infrastructure projects. This work should start coming through before the end of 2009.

http://smallbusiness.yahoo.com.au/Article/a_boost_for_small_businesses