Measures have being put in place to help small businesses in Australia to adapt more easily to the constantly changing economy. Some of these measures were proposed in the Federal Budget for the year 2018 and they include a number of ideas and initiatives targeted at helping Australian small business owners to grow their business. These are some of the implications that have come about as a result of the budget.

Extension of Instant Asset write-off

An extension of twelve months was provided for the instant asset write-off, prolonging the period up till the 30th of June 2019. This extension only applies to any purchases of assets worth at least $20,000 and businesses/companies with a turnover running below $10m.

Tax Reform

Changes have been made to the turnover  threshold as a result of the 10-year enterprise tax plan set up by the federal government. Before the 2018 Federal Budget, the threshold for eligibility for the reduced tax rate of 27.5% was $25m. That figure has now been extended up to $50m. The expected result of this development is that a larger number of small businesses can benefit from the reduced tax rate, keeping more profit for themselves than they may have been able to pre-budget.

The tax reform also includes a possible increase to the tax discount rate given to small business owners. A 3% increase is expected, budging up the 5% discount rate pre-budget to 8% post-budget. A follow up of this increase is expected in the coming years as the federal government has stated that the rate is expected to rise up to 16% within the next 8-9 years.

Additionally, a larger number of small business owners can take advantage of a new range of tax concessions made specifically for their benefits. This is a result of a spike in the small business entity turnover from a figure of $2m to $10m.

“Red-tape” reduction

Some of the work involved with this was already started in the budget from the year 2017. The 2018 budget has made more progress this year, streamlining the GST reporting process for small businesses. Previously, business owners had to respond to only twenty questions in the Business Activity Statement worksheet but they only have to respond to three questions now.

Improved support for entrepreneurship

The budget includes a large sum of $17.7m AUD set aside for expansion of the existing Entrepreneurship Facilitators Program. The program provides mentoring, training and support for entrepreneurs in Australia. It is particularly focused on people aged 45 years and over and it is expected to become available nationwide in the coming years.

Improved support for Australian exports

The Federal Government has also allocated $20m AUD to provide support for small and medium business owners looking to expand their businesses and go into offshore markets. A lot of strong business opportunities are constantly opening up in export and the Federal Government has shown strong interest in helping Australian businesses to take advantage of them with the new budget allocation.

Before making any financial decisions for your business based on the budget changes- particularly the new tax information – you should consult a professional for advice. This is advisable because taxation laws are prone to change at any point, so you must make sure that you aren’t working with outdated information.


About the Author
Marshall Freeman is Australia’s leading professional debt collection agency. Through servicing over 20,000 businesses throughout Australia for over 15 years, they have gained a reputation as an industry leader in providing sound financial information, knowledge and education for small and medium sized enterprises. With a strong track record in cash flow management, they often key note speakers at leading conferences around the world with a key focus on mentoring future debt collectors and educating businesses on key debt recovery fundamentals to support commercial growth.

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