Speaking Sensis

By now you will have seen the headline figures from this year’s Commonwealth Budget and although billed as “boring” by it’s main author, Christena Singh tells us what was interesting for small businesses …

Now, I’ve been asked to write a bit about the good news in the Budget for small businesses. And, as you would probably already know, the term “small business” was not one that received a lot of attention on Budget night.

Probably the best bit of news for small businesses in the Budget this year was that the Australian economy turned out to be in a better position than anticipated as you will see from the attached chart.

This chart actually builds on something the Head of Treasury, Dr Ken Henry, talked about after last year’s budget.  He was trying to forecast how Australia would come out of the recession this time round.  A year ago, the Australian Treasury was forecasting that we would actually head into technical recession, and it also had some gutsy predictions about the growth rates afterwards.  You may recall that some debate ensued …

But as you can see from the white line, we did not have a recession, and the economy is continuing to exhibit strong growth.  The Budget Deficit also exhibited strong growth this financial year, but that is another story …

However, it is important to remember that it is the businesses of Australia that are responsible at the end of the day for generating the positive economic results that are evident in this year’s Budget.  So apart from a growing economy, what was in the Budget for small businesses this year?  There were a few measures, but they won’t come in for a few years; so you won’t want to hold your breath. 

But in 2012-13 small businesses will get: 

• A two year head start on the new lower company tax rate – small companies will be able to access this from 2012-13, but note that this only applies to incorporated businesses; and

• The threshold under which small businesses can instantly write-off depreciable assets will increase from $1000 to $5000.

And another measure which may assist some businesses, particularly those that have had trouble finding staff, will be the $300 million that will be invested in skills. This includes $200 million for the Critical Skills Investment Fund, which will provide support for up to 90 per cent of training costs for small businesses. However, this will be allocated on a competitive basis, with firms having to apply for funding.