21 February 2017
Bipartisan tax cut support vital for small business confidence - MySmallBusiness
By Kate Carnell.
In order to truly instil confidence among small business owners, all politicians must embrace the proposed tax cut for businesses with a turnover of up to $10 million, allowing the sector to grow and thrive well into the future.
Confidence is everything in small business; confidence leads to growth, which in turn leads to more jobs; more jobs for school leavers, more jobs for working parents, more jobs for older Australians. However, we risk undermining this confidence when one of the major parties continues to argue against what would undeniably be a vital stepping stone for future expansion in the sector.
Despite acknowledging their importance to the overall health of the economy, the federal opposition continues to oppose the flagged tax relief for small businesses.
The idea that the definition of a small business should be limited to those with a $2 million turnover is quite frankly outdated; there are many mum-and-dad operated small businesses around the country that are turning over well in excess of that figure, but they are by no means a "big" business. And let's not forget, we're talking about "turnover" here, not profit.
Lowering the company tax rate to 27.5 per cent for businesses with a turnover of up to $10 million will achieve two primary objectives. First and foremost, it creates an opportunity for thousands of small businesses to invest and expand their enterprise. Second, it sets out a challenge for the sector to harness the possibilities that are now in front of them and seize the chance to innovate and employ, which benefits everyone.
Owning and operating a small business can be hard – I should know, I did it for many years – so I speak from experience when I say business owners won't pocket the savings from the tax break, they will reinvest it; they will spend it on new plant and equipment or they will hire that extra employee they so desperately need.
Latest figures show confidence in the small business sector is at its highest level since 2010 with more than four times as many SMEs now feeling confident compared with those who are "worried". Let's keep that momentum going.
Close to four million people are employed by small businesses in Australia. Unlike large businesses, the tax revenue generated by this sector is on the rise, so their importance should never be underestimated, and their growth shouldn't be taken for granted.
I'm encouraged by the support of the Senate crossbench for small business tax relief and I call on Labor to do the same; if small businesses are to confidently invest their time and money in the future, they need to know both major parties support them in their endeavours in the months and years to come.