The Australian Government has said the Federal Budget, set to be delivered next week, will include measures to support small business.
Federal Treasurer Joe Hockey and Federal Minister for Small Business Bruce Billson have said the Jobs and Small Business package, to be officially announced in the 2015 Budget, will “help small business to invest more, grow more and employ more”.
Mr Hockey and Mr Billson claimed that in 2014 new company registrations were “the highest on record” and there were “nearly 4,000 jobs created every week”.
“Small business has been telling us that red tape and regulation is killing them,” Mr Hockey and Mr Billson said in a joint statement. “Today we are announcing measures that make it easier for small business to do business,” they said.
Measures to support small business
From July 2016, new start-ups will be able to immediately deduct professional costs associated with starting a business rather than writing them off over five years.
“Many people need the advice of lawyers and accountants when they start a business,” the Government statement said. “This can be expensive and a drag on cash flow,” it said.
The announcement said allowing these costs to be deducted immediately would allow more money to be invested in growing the new business.
Business registration will be streamlined with a single online registration site. The Government said this would “fix the current fragmented and complex process, saving time and money”. On the other hand, the Government said it has yet to consult on the current framework that guides the establishment and regulation of corporations. The Government will now investigate whether some of the regulatory requirements can be removed or relaxed to reduce compliance costs.
Small business owners will also be able to change the legal structure of their business without incurring a CGT liability. The Government said this would reduce some of the complexity of starting a new business and provide business owners with more flexibility to determine how they grow. However, it was not made clear in the statement as to how or whether this will be any different from the existing rollover relief measures that exist in the current capital gains tax legislation.
The Government said it would also make it easier for small businesses to access the capital they need to grow and thrive by removing obstacles to crowd-sourced equity funding. Mr Hockey and Mr Billson said this change “compliments the expanded tax concessions for Employee Share Schemes currently before Parliament”.
Speculation on post-Budget election brewing
Commentators are suggesting that the Government strategy during the past two months of “clearing the barnacles” and backing away from contentious budgetary measures is a sign that the Government favours going back to the polls soon after the Federal budget, which is due to be delivered by the Government next week.
The fact that the Government announcement in relation to small business contains elements that are clearly premature, lacking substantive detail or requiring further consultation merely to ascertain the facts (such as introducing a website for online registrations when existing websites do this at a State level), demonstrates an electioneering mode.