Seven in ten small businesses want the $20,000 instant asset tax write-off to continue past 30 June, this year, when it is due to expire, according to accounting software provider MYOB.
The latest MYOB Business monitor, a bi-annual survey of more than 1,000 small businesses, asked operators what policies they would and wouldn’t vote. MYOB CEO Tim Reed provided insight into the key findings.
‘The write-off has been a huge boon for SMEs’
Making the ‘temporary’ write-off a permanent fixture for businesses with annual turnover of less than $2 million topped the SME wishlist, with support from 68% of respondents.
“The write-off has been a huge boon for growing businesses, enabling them to better match their cashflow with the need to invest in new assets,” Reed said.
“While the total tax paid overtime does not change, the write-off brings forward the deductions from investing in new assets, enabling SMEs to claim their expense in one lump sum rather than depreciate it over several years. This shows the government understands the aspirations of, and challenges faced by, growing businesses, and empathises with them.
“Within the first six months of the write-off being introduced, over one quarter of SMEs had already taken advantage of this measure with franchisors being the front runner at 51%. So, we know it’s welcomed by SMEs and is a great initiative in the right direction, and we encourage the government to make this policy a permanent fixture to help SMEs kick-start their growth.”
‘GST compliance costing SMEs $13.7b per year’
Simpler GST and BAS compliance also had strong support from respondents, with 66% indicating they would vote for this change.
“Small businesses are often resource and time poor, and can find it difficult to comply with GST and BAS,” reed explained. By simplifying account set-up, GST record-keeping and BAS preparation, businesses will be able to more easily classify transactions and prepare and lodge their BAS. The ATO have listened to the concerns of small businesses and are working towards reducing GST compliance costs for small businesses. Specifically they are looking to reduce the amount of information needed on the BAS form around the G-codes, which make record keeping very complex. This is great news, and we encourage the government to continue simplifying this process as it will ultimately provide SMEs with more time and money to focus on their business.
“MYOB has commissioned research with Australian and New Zealand small businesses to find out the cost of administering GST. The results show GST compliance costs Australian SMEs more than $13.7 billion a year, which is $6,778 a year for each of Australia’s two million SMEs. This cost could be halved if the GST was revamped to reflect a simpler model, like that in New Zealand.”
The Business Monitor also revealed strong support for the following policies:
- Government assigning a proportion oftheir procurement contracts to small business (61%)
- Reducing the company tax rate from 30% to 28.5% (60%)
- The establishment of an incentive bonus for business employing people over 50 (59%)
- Increased Federal Government funding for skills, training and apprenticeship programs (57%)
- More Federal Government investment in transport infrastructure in our major States and cities (56%)
- Increased Government funding for innovation, research and development by Australian businesses (55%)
- Offering a wage subsidy for employing young Australians (51%)
‘Government dissatisfaction driven by uncertainty, fear’
The Business Monitor also looked at whether respondents were satisfied about the federal and state-level governments.
Just 22% were satisfied with the federal government’s performance while 33% were dissatisfied and 44% were on the fence.
Meanwhile, Queensland operators were the most dissatisfied with their state government (51%), followed by South Australia and Western Australia (50%. Each). This was in sharp contrast to Victoria and New South Wales, with 29% and 37% respectively.
“From a small business perspective, higher levels of government dissatisfaction can often be linked to uncertainty and fears of instability,” Reed said.
“We know that South Australia is currently experiencing higher unemployment rates compared to the national average, a decline in manufacturing as well as stagnating wages. These factors create an environment of volatility for SMEs where they second-guess their decisions for their businesses. With the WA state election just six weeks away, it’s a critical time for state government to tap into SME mindset and understand how to improve those ratings.”Attribution: A permanent $20,000 instant asset tax write-off for businesses tops SME wishlist, MYOB finds