The centrepiece of the 2015-16 Budget was a $5.5 billion Jobs and Small Business Package that provides an opportunity for small business (0-19 employees) through tax cut relief and accelerated depreciation of assets costing under $20,000.
Other general business benefits such as red tape reductions, FBT exemptions for portable devices, and a new jobs package for younger and older Australians should provide more general benefits for the grocery, petrol and convenience sector.
Over 90% or $5 billion of the Jobs and Small Business Package is dedicated to tax relief measures.
“Small businesses are the engine room of the Australian economy, employing over 4.5 million people and accounting for approximately one-third of Australia’s economic output, with 96% of Australia’s businesses small businesses,” the Budget papers said.
Under a three-part tax relief package:
- All small businesses will receive an immediate deduction on each and every asset costing less than $20,000 bought between Budget night and 30 June 2017 (worth $1.75bn).
- Small corporations will benefit from a 1.5 percentage point cut in their company tax rate ($1.45bn), from 1 July 2015.
- Unincorporated small businesses will receive a 5% tax discount of up to $1,000 per annum ($1.8bn), from 1 July 2015.
- Accelerated depreciation applies to all individual assets costing less than $20,000. Assets over $20,000 can be pooled and depreciated at 15% in the first income year and 30% per year thereafter.
Measures to cut red tape and encourage entrepreneurship (worth $40 million) follow the March 2015 announcement of reforms to generate more than $2.45bn in red tape savings for businesses, individuals and community organisations.
The Government will reduce red tape within the Fringe Benefits Tax system by expanding the FBT exemption for work‑related portable electronic devices to help small business employees stay connected in the digital economy.
Small businesses will also benefit from Capital Gains Tax rollover relief when changing their legal structures but keeping the same owners.
To further boost entrepreneurial endeavour, start‑ups will be allowed to immediately deduct professional expenses incurred when they start a business, such as legal expenses on establishing a company, trust or partnership; rather than writing them off over five years (worth $70m).
A single online registration site will be developed for business registration, including company registration, to provide all relevant information clearly and have integrated customer support.
The package also includes $375m in new measures to help Australia’s unemployed find jobs, including a reinvigorated Restart wage subsidy to encourage small businesses to employ older workers
Other measures will help employers take on unemployed job seekers; build employability, particularly for young people transitioning to work; and strengthen job seeker obligations.
The Government will also extend the GST Compliance Programme to support targeted and integrated compliance strategies to detect, deter and deal with unintended errors or deliberate GST fraud and evasion.