Industry groups have applauded measures contained in the recent budget to promote small business growth.
The Australian Advanced Manufacturing Council has welcomed changes to the small business tax rate – and the change in the eligibility threshold from $2 million turnover to $10 million.
“In order for Australian companies to compete globally, they must increasingly achieve scale, keep pace in their process technologies, and supply higher value products,” Executive Director of the Australian Advanced Manufacturing Council, Jennifer Conley, said.
“These tax changes support that growth. Ensuring these entities gain full and reasonable benefit from ATO allowances for small business will support their growth and continued viability into the future.”
Ms Conley said Australian advanced manufacturers are achieving great things in the face of intense global competition, but she admitted conditions are tough.
“Companies must keep pace globally,” she said.
“This requires accelerating the uptake and development of technology and processes across industry. Lowering the corporate tax rate over time is a positive support for the ambition of many of our small businesses to become medium-sized – and even large-sized.”
Australian Industry Group Chief Executive, Innes Willox said the budget was good for small business.
“Overall this is a measured budget that balances fiscal responsibility and a path to budgetary sustainability, with important measures to boost businesses competitiveness and reduce our high corporate tax burden,” Mr Willox said.
“Extending eligibility to small business tax measures to companies with turnovers of up to $10 million a year will provide a shot in the arm for up to 60,000 small to medium-sized businesses and for the economy.”
Mr Willox said Ai Group welcomes new measures to address tax avoidance and aggressive tax planning.
“Businesses and individuals have an obligation to comply with the tax law and the vast majority do,” he said.
“It will be critical for the Government to consult widely over the proposed Diverted Profits Tax and the new Tax Transparency Code. A particular area of renewed focus should be on combatting the cash economy.
“Business will also welcome the development of new pathways helping young people enter the workforce. By making young people become more work-ready through pre-employment training and internships, the Youth Jobs PaTH initiative targets a leading concern of business around employability and backs these measures with accelerated and simpler wage subsidies. These measures will assist businesses make an important contribution to improving the lifelong employment prospects of eligible young people.”
“The ongoing budget commitment to innovation is positive. Leaving the Research and Development Tax Incentive untouched is a crucial step in rebuilding business confidence in this important program.”
Mr Willox said the Government’s renewed efforts in higher education and its commitment to consultation with the higher education sector and with business are to be applauded.
Also, plans to fix the VET FEE HELP scheme is an important step in lifting the confidence in Australia’s Vocational and Training system.
“Without question a major challenge in Australia’s training system over the coming years will be to overhaul the Apprenticeship system,” Mr Willox said.
“The biggest disappointment is the deep cut in funding for the Industry Skills Fund. This is a setback for improving workforce capability at a time of major changes in workplaces and the workforce.”
Business Council Chief Executive Jennifer Westacott described it as a “solid, responsible budget” that balances holding the line on spending growth with new initiatives to improve the nation’s economic growth prospects.
The government has rightly recognised that durable budget repair will not be achieved by increasing the overall tax burden, Ms Westacott said.
“The government’s 10-year enterprise tax plan is the signal that Australia’s businesses need to drive greater investment, and create more jobs, better jobs and higher paid jobs,” she said.
“It’s an immediate reduction for the small and medium business that need relief now.
“The last thing Australia needed in the current economic circumstances was a big spending and taxing budget that would place our credit rating at risk and jeopardises the capacity to grow the economic pie to underpin the jobs and higher incomes we all want.
“While the budget highlights that there is still work to be done in coming years to put the nation’s finances onto a sustainable footing for the future, the government has laid down a solid framework in this Budget for that work to continue.”