2019 Federal Budget: The key take-outs for small business

Here’s a break-down of five big-ticket budget items that will impact Australian small business owners.

1. Small business tax cuts

Previously promised tax cuts for small and medium businesses will be brought forward, with the tax rate dropping from 27.5% in the 2019–20 financial year to 25% in 2021–22 – five years earlier than planned. Businesses with turnovers below $50 million will be eligible for this tax rate.

2. Instant asset write-off boosted to $30,000

The small business instant asset write-off scheme has been lifted from $25,000 to $30,000. Small businesses with an annual turnover of up to $50 million are now eligible to receive upfront deductions on asset purchases up to $30,000, rather than depreciating them over multiple years. The expanded instant asset write-off scheme is available now until 30 June 2020.

Co-founder and CEO of designer fashion rental marketplace, The Volte, Kym Atkins says: “We are pleased about the asset write-off threshold increasing, and allowing businesses to help reinvest and grow their business. Tax cuts will mean many business owners will be breathing a sigh of relief, too.”

3. Small business exports encouraged

Small businesses looking to export overseas will receive a combined $61 million, over three years, in assistance to help spread the word about their products.

The Export Market Development Grants (EMDG) scheme will allow small businesses to capitalise on opportunities created by a raft of free trade agreements recently signed by the Federal Government.

Mike Rosenbaum, co-founder, The Sharing Hub and CEO of Spacer.com.au says: “Many founders have their sights set on overseas, and feedback from many who have already taken advantage of this grant is that it’s beneficial in helping Australian businesses compete on a world stage.”

4. Help with tax disputes

A new Small Business Taxation Division will be created within the Administrative Appeals Tribunal to improve decision-making processes and give businesses dedicated case managers. This will assist small business owners who wish to process a dispute with the ATO but would otherwise not have the resources or knowledge to do so.

The ATO will also be required to reimburse businesses in certain circumstances for reasonable legal costs involved in challenging an ATO ruling. This will allow small business owners greater confidence in challenging an ATO decision.

Sham contracting has also been targeted, with the Fair Work Ombudsman to receive $2.3 million in annual funding beyond the 2023 financial year to focus on this issue.

5. $2 billion Australian Business Securitisation Fund

The Australian Business Securitisation Fund (ABSF), which was announced by the Federal Government last year to help encourage lending to small business, has officially been established following Tuesday’s Budget.

This government intervention is a huge win for small businesses across the country, who have found it difficult to access funding from banks and traditional lenders.

The $2 billion ABSF will lower the cost of capital for non-bank lenders like Prospa and help deliver more affordable funding options to small businesses, at a time when their success is critical to Australia’s growth.