Now that we’re into the new financial year, many brokerages have started to see how the federal budget will affect them. But with some winners and some losers, the majority of brokerage owners are left wondering what lies ahead for them.
Here’s a summary of the main pros and cons of the budget for small businesses, and what it means for your brokerage.
• Businesses with an annual turnover less than $2 million can claim immediate tax deductions for as many sub-$20,000 purchases as they want before 30 June 2017, rather than having to claim those purchases as deductions spread over several years.
• Compliance costs for businesses and individuals have been reduced, with the government setting a target to reduce compliance costs by $1 billion each year.
• Company taxes have been reduced from 30 per cent to 28.5 per cent.
• With the retirement age in Australia set to increase to 70 by 2035, a large chunk of the Australian labour force will be made up of senior citizens. Small businesses that hire employees over the age of 50 will receive a $10,000 incentive from the government.
• The government has promised $29.4 million in assistance for small and medium-sized businesses quoting for government services and tenders.
• Another $12.9 million has been allocated to help businesses access the National Broadband Network.
• The superannuation concessional contribution cap has been increased, and individuals will be allowed to withdraw any excess concessional contributions from their fund.
• The government have also promised funding to standardise the business name registration process.
• Self-education expenses are capped at $2,000 per year. Most conferences and training courses these days cost more than that.
• The fuel excise rate has increased, which means that businesses have to pay more for transportation and logistics.
• The ATO will receive additional funds in order to investigate and crack down on tax compliance among trusts. This is a structure used by many small-business owners in Australia, especially in our rural communities.
• There will be more upfront checks for new businesses wanting to register new Australian Business Numbers and an increased business-name registration fee.
Overall, it seems the pros outweigh the cons for the majority of small and medium-sized businesses in Australia. Brokerages in particular can also be helped by accessing services such as advance commission loans to maximise cash flow. With this kind of assistance available, brokerages can plan for expansion, hire additional staff or buy new equipment, which may have not been previously possible.