MYOB has rated the Federal Government’s 2016 Budget a 9/10 for its positive impact on Australian Small and Medium sized businesses – saying the initiatives are welcomed but could have gone further and faster.
MYOB congratulates the Federal Government on again recognising the power of SMEs in driving the Australian economy especially as it transitions away from a reliance on the mining boom.
For a long time MYOB has called for a reduction to the company tax rate and today welcomed the announcement to eventually reduce it to 25%, and to complement it with an increase in the tax discount for unincorporated businesses from 5% to 7%.
However MYOB’s CEO and leading small business advocate Tim Reed said many SMEs need these changes now, not in 10 years’ time when some businesses may not even be around to benefit from it.
“The Government’s economic plan deserves a 9/10 for respecting the vital role SMEs play in the Australian economy,” said MYOB CEO Tim Reed. “This is the second year in a row where small and medium businesses have been recognized and put front and center in the budget. I have no doubt they will respond in the way the government hopes – by investing more in innovation and creating high quality jobs.”
“The plan to cut the company tax rate to 25% is an excellent one however the timeline could and should be shortened. It’s like SMEs have been given a terrific present but told it is coming in pieces and they can’t open it up for a decade.”
“MYOB also welcomes the move to widen eligibility for the $20,000 tax write off for small businesses however the Government should consider making this a permanent feature to better support the economy.”
MYOB believes the Federal Government has also listened to SMEs who have long called for a simplification of Business Activity Statements (BAS).
“Simplifying GST compliance has been a high priority for businesses for over a decade now so we heartily congratulate the Government for announcing a trial to streamline the process. This is something we’ve been lobbying the government about for years, it is great to see this is a government that listens to and responds to requests from small business.” said Tim Reed.
“Reducing the “G-Codes” or “tags” on the BAS from seven to three as part of that trial is a great step forward.”
Through MYOB’s research with Australian and New Zealand small businesses found that GST compliance costs Australian SMEs more than $13.7 billion a year, which equates to $6,778 a year for each of Australia’s two million SMEs. MYOB suggests that this cost could be halved if the GST was revamped to reflect a simpler model, similar to that in New Zealand.
“If the Government had the conviction to fully address the GST issue once for all in this Budget, MYOB would have given it a 10/10, but we knew some time ago the government had no appetite to broaden the base of the GST – that is the only way to truly make it simpler for small business owners.”