Small Business pleased with Turnbull Govt Election Budget
The Chamber of Commerce and Industry Queensland (CCIQ) is delighted that the Federal Budget has recognised small business as the backbone of the economy.
CCIQ Director of Advocacy Nick Behrens said measures announced tonight by Treasurer Scott Morrison in his first Budget were immediately encouraging for small business.
He said the Treasurer had delivered for SMEs with company tax cuts, innovation and infrastructure measures, plus training and jobs for young people.
“The Coalition in this year’s Federal Budget 10 year enterprise tax plan has pleasingly chosen to additionally tap medium-sized businesses on the shoulder to grow and provide jobs needed for prosperity,” he said.
“This Budget is a crunch one for the Coalition Government and it has outlined a plan for growth and jobs; sustainability of the tax system and committing Australia to live within its means.”
Mr Behrens said that with an election likely on July 2, the Budget created both challenges and opportunities for the Turnbull Government.
“Realistically this will in the longer term be viewed as missed opportunity for holistic reform to the way we tax and spend,” he said.
“After all, the decisions needed are unpopular ones that unfortunately have negative implications at the polling booths across the nation – this is a budget focused on the next two months and not the next two decades.
“But, in our view, it strikes the right balance in trimming government spending, delivering tax change and in turn economic growth and job creation.
“It recognises the imperative to tackle the embedded structure deficit that exists in the Federal Budget and commence paying down debt.”
The budget deficit in 2016-17 of $37.1 billion is projected to fall to just $6 billion by 2019-20.
“CCIQ’s view is that balancing the nation’s books should hinge on reducing government spending rather than implementation of additional revenue grabs,” he said.
“However, we support revenue-raising measures such as increasing tobacco excise and cracking down on multinational tax avoidance.
“CCIQ is confident that the Federal Election will prove to be a significant opportunity to secure vitally needed infrastructure funding for Queensland.
“But it would appear that the government is choosing to keep its powder dry in terms of infrastructure commitments to the Sunshine State. Only the Ipswich Motorway ($200 million) has got a tick in its box tonight.
“Specific funding for the new tier of projects to drive Queensland’s economic future that are yet to get funding include Brisbane Cross River Rail; Port of Brisbane dedicated freight rail connection; Beerburrum to Nambour rail upgrade; Mount Isa – Townsville rail corridor upgrade; Bruce Highway and the M1 Pacific Motorway.
“The Federal Government will need to step up in this area.”
Mr Behrens said small business should be encouraged by the measures announced by the new Treasurer.
“It was almost impossible to match last year’s Budget, which was labelled as being the most small-business-friendly in over two decades. But this Budget has come extraordinarily close.
“Scott Morrison’s Budget will materially benefit the state’s 416,000 SMEs that employ close to two million Queenslanders.
“It will benefit business through boosting confidence and when coupled with the range of stimulus measures SMEs are again the big winner from a Coalition Budget.”
Small business with turnover of less than $2 million will receive an additional one per cent reduction in company tax. Incorporated businesses with a turnover between $2 and $10 million will receive a company tax cut of 2.5 per cent, with all business under $10 million now at a taxable rate of 27.5 per cent.
“This is crucially important as these medium sized businesses are equally scalable and can grow to create the activity and jobs needed by the Coalition for re-election,” Mr Behrens said.
“A 10-year glide path will inevitably see all businesses paying an internationally competitive company tax rate of just 25 per cent.
“The government has also extended the eligibility for its $20,000 instant asset write-off scheme to businesses under the $10 million turnover threshold. The instant asset write-off last year was a big deliverer of economic activity and jobs and is again on the table, but this time for businesses with a turnover up to $10 million.
“Finally, the government will increase the tax discount to 8 per cent for unincorporated businesses with annual turnover less than $5 million, capped at $1000. This discount will be further increased in phases to reach 16 per cent by 2026-27.
“Collectively these measures are anticipated to save Queensland SMEs $250 million in 2016-17 and that will dramatically rise across the next decade.”
Mr Behrens said businesses had received little insight they would have hoped for on election policy that the Coalition would likely deliver from next week in the lead-up to the July 2 poll.
“Queensland SMEs will inevitably want to see more progress on tax, federation and workplace relations reform that will ensure they have confidence to grow, invest, and create jobs,” he said.
“But it is a Budget that unmistakably provides confidence to Queensland small and medium sized businesses. The small business community will take a lot of heart from what was given to them tonight, providing the opportunity for future growth and jobs.”