Media release

Budget impact on small business

12 May 2010

Small business operators in Western Australia will have plenty of time to adapt to the changes announced in the Federal Budget yesterday, with many of the initiatives taking two or three years to come into force.

Small Business Development Corporation (SBDC) Acting Managing Director, Ms Jacky Finlayson, says it is unfortunate that the tax breaks as mentioned in the Henry Review will not be introduced until 2012-13 and will only apply to incorporated businesses.

“Around two thirds of all small businesses will miss out on these tax cuts and those who are eligible, will need to wait a long time before they see their tax rates drop to 28 per cent,” Ms Finlayson said.

“It is also likely that any savings a business might make in tax cuts will soon be negated by increased superannuation payments to workers.”

Small business operators working within a GST framework will need to pay extra attention to recordkeeping with the Australian Tax Office cracking down on fraudulent returns, under-reporting and non-payment of GST debts.

“In the current Budget, the Government has allocated $445 million over the next four years to stamp out the cash economy and increase GST compliance,” Ms Finlayson said.

“The Government is looking to recover an estimated $3.2 billion in lost revenue, and will be checking on businesses of all sizes.”

On the other hand, small businesses will welcome the Government’s support and assistance to employ apprentices and trainees. These initiatives will help build a strong workforce for the future.

“With unemployment tipped to drop below 5 per cent by mid 2012, skilled workers will once again be hard to find,” Ms Finlayson said.

“Any initiative that will increase the number of skilled workers in Western Australia is very welcome.”

Media contact: Di Graham (08) 9220 0218 or 0409 089 159.

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