Page 1837 - Week 06 - Thursday, 14 May 2015
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Gillard-Rudd government. But the initiatives announced on Tuesday will go some way to bringing back the confidence and certainty that those that operate small businesses rely on to invest, develop, innovate, employ and grow.
Most importantly of all, the biggest headline has been the 1½ per cent cut to the company tax rate. This means businesses in Canberra will have more of their own money in their pockets to reinvest into their businesses to potentially create new job opportunities and further invest in this city of ours. The opportunity to instantly write off a company asset purchase up to $20,000 provides some much-needed stimulus to the business sector across the country. Retail wholesalers that service businesses in the ACT have welcomed this move, as it will certainly bring in the short term an increase in business which will help those green sprouts of confidence germinate and flourish, which is what we all require.
The other very welcome news for small businesses and start-ups in the ACT is the opportunity to deduct professional expenses for setting up a business. That is often one of the most costly exercises—someone has a great idea but how do they get that idea from conception into a market reality? It often takes a lot of professional services and, therefore, fees to establish a business—making sure they have adequate insurance and registrations and setting up premises. Those professional fees being deducted in the first year of operation will be of great benefit to the cash flow of a business in its infancy.
So too will expanding the tax concessions on employee share schemes. Whilst they are attracting the expertise, technical skill and knowledge required to go to the next level, small start-ups often offer part ownership of the business as an incentive so that the right employee can buy in and be a part of the success the business may one day become. Removing the need to pay tax on those shares until such time as they realise an income from them is a common-sense move and will offer greater flexibility for business, particularly in the ACT, which we are trying to promote as a destination for start-ups. It is much-welcomed news.
Businesses in the ACT had the confidence boost they were looking from the federal government in the Tuesday night’s budget; what they are now concerned about is the impact of the budget this Chief Minister and Treasurer of the ACT Labor-Greens government will introduce on the first Tuesday in June. We have heard time and again of the impact Mr Barr’s so-called budgetary reform—that is, tripling people’s rates—is having on people’s bottom lines.
Just the other day my colleague Mr Doszpot quoted from a letter we received from a good friend of ours with a business on Newcastle Street in Fyshwick who, in the last two years, has experienced a 35 per cent increase in his rates. From 2009 to 2013 his rates were consistently between $6,000 and $7,000 a quarter—usually around $6,700. We are talking about $26,000 a year. Jump forward to 2014-15 and he is now paying $9,227 per quarter. That equates to a 35 per cent increase. With one stroke of the pen, this Treasurer can undo all the goodwill and all the good work done by the federal government on Tuesday night to help support, stimulate and grow small business, not just in the ACT but across the country. With one stroke of the pen it can all be undone, and the lack of confidence, the doldrums, the dark days, the struggle will continue for so many ACT businesses.
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