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Small business and the Budget: how it will affect you

Treasurer Wayne Swan announced in his Budget speech last night that small businesses are the “backbone of the Australian economy” and as such has implemented a number of measures in the Budget designed to support small business.

Council of Small Business of Australia (COSBOA) CEO Jaye Radisich supports the latest measures which include a small business tax break, a support line, an online program, R&D tax concession along with infrastructure and national building investments.

Ms Radisich said that it is “good to see that small business is clearly back on the agenda at the Federal level” and that overall, “small business are winners in the budget.”

Among the measures implemented for small business include:

  • Small business tax break – The Government have increased the Small Business and General Business Tax Break (Investment Allowance) from 30 percent to 50 percent, and extended the deadline to December 31, 2009.

The 50 per cent deduction will be available on new capital worth $1,000 or more, such as vehicles, purchased between December 13, 2008, and December 31 this year. The eligible items must be installed and ready for use by December 31, 2010.

Ms Radisich welcomed the measure believing it is an “attractive proposition” for small business and will give them extra time to make purchasing decisions on capital items over $1000.

She has suggested that small businesses should try and buy from each other, in order to provide further support to the small business community and local jobs.

  • Small business support line – $10 million invested over two years to help small businesses with advice during the recession.

Ms Radisich believes that in tough times small business need access to help and to know that “there’s someone to turn to when things get tough.”

“Having a dedicated first point of contact for inquiries ranging from problems with access to finance through to retail leasing issues will be an important service to small business.”

  • Small business online program – The scheme is designed to help small businesses participate in the digital economy and enter the world of e-commerce, a move that Radisich is “excited about”, believing that “now is the perfect time for businesses who haven’t participated in e-commerce before to do so as every business can benefit from even the most simple web presence.”
  • The new R&D tax credit – supports small businesses by offering up to twice the current value of the tax R&D tax concession that is currently available.

“The renewed emphasis on the R&D tax credit firmly acknowledges the important contribution that private investment in R&D makes to our nation’s growth and productive capacity,” Ms Radisich said.

More education needed for small business rights and obligations

Ms Radisich believes that while there are a number of beneficial measures implemented in the Budget for small business, there are still a few issues of concern, namely around stronger emphasis on education for small business regarding their legal obligations in the workplace.

“We are concerned about the Fair Work Act and the negative implications for small business. It is a very complex legislation that makes it disproportionately harder for small businesses to comply with as they don’t have large human resource departments and access to expensive consultants or lawyers.”

COSBOA are calling on the Government to allocate funds for employer and employee education about their rights and responsibilities under the Act.

A report commissioned by Telstra last month has shown that many small businesses are unaware of the industrial changes and are not ready to implement them in any way. This is particularly worrying says Radisich, as small business can be particularly vulnerable if they are not provided with sufficient information.

“ The message needs to be spread about small business obligations in relation to the Fair Work Act so they know where they stand.”

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