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June 7th, 2015
Some will spend up big, but others say they’re affected by other cuts and don’t have the money to spend.
The 2015-16 Budget offered a surprise for small business, the revival of a Gillard era sweetener that let them write off a deductible asset and instantly get a return on their taxes. Under Julia Gillard the scheme was capped at an asset value of $6500 and was tightened down to $1000 when the Abbott government scrapped the mining tax.
The big difference this time is that the value has been nearly trebled to $20,000. So a business with a turnover under $2 million can claim fridges, cars, or anything they like under the threshold and do it multiple times, and get a tax deduction up to $6600 immediately.
The scheme is worth $1.75 billion to the budget and it will run until the end of the 2016-17 financial year.
Businesses have told The New Daily they will buy quad bikes, refrigeration and cooking equipment, and some say they’re affected by other cuts in the budget and won’t have a taxable profit to deduct from.
“Definitely a couple more quad bikes and a buggy, so people who don’t want to ride the bikes like their family or friends could still come along on tours,” Ms Kerley says.
“We are more likely to look [at spending] now because there is a little bit of encouragement and help if we do it.”
“Having more bikes would help us be able to take more people out on tours. We often have to turn people away because we only have six at the moment.”
But for this tourism business, there’s a catch – increased taxes on foreigners in Australia for a working holiday.”
“Tourists won’t want to spend more money if a tax was going to take away from their ability to spend.”
“You know they save and that’s all they’ve got.”
“A majority of our customers are international tourists.”
“We’re 100 per cent more likely to buy something,” the cafe’s owner, Amar, says. “A new stove and possibly a new coffee machine.”
“I could get the stove that we actually want as opposed to the one we’ve got.”
“The one we’ve got is fine but we could get one that’s more practical, that’s got nice add-ons with a built in griller and other features.”
“We’d be able to bang out more food and it would be more energy efficient.”
“And updating the coffee machine would be good.”
“Nothing wrong with this one, it makes great coffee, a new one would just be faster to clean for the staff and it would make coffees more quickly.”
“A new flash bang one would be great. Go Joe!”
“We’re looking at a new computer system but I am probably of the mind that I’d only buy it if we needed it,” owner Michael Hickey told The New Daily.
“I wouldn’t buy it just for an instant write off, I am more cautious with my money than that.”
“The computers would just be keeping technology up to date with my business. I have all the latest software available and we need a fast computer for a retail business.”
“We update every three or four years anyway so we have a capable and sustainable business.”
“To be honest when I saw it [the small business tax concession] no word of a lie, I thought I don’t really need to invest in anything else toward the business, but I might as well splurge out and buy a new car,” owner Luke Scicluna confessed.
“So I’d put that to the business and obviously use that to my advantage.”
“Having said that, I already have a car but I did give some thought to enhancing another company I have launched.”
“It would be getting a pop-up bar type thing for the Adelaide Fringe Festival. I’d spend the money on an old shipping container that can fold out and up on hydraulics and can turn into a bar.”
“For sure, I’ve had a look at how I can improve things because of the announcement.”
Owners Helen Marcou and Quincy McLean said they weren’t going to buy anything, but if they had the money, they would deduct their new PA equipment and buy office equipment with the proceeds.
“If we were making enough profit and we had $20,000 in the bank and were looking to spend up big it would be great,” they said.
“But realistically, in most small businesses like ours, expenditure is really carefully measured out. When we make really big purchases, years of planning goes into it.”
“So we’re not just going to go and lash out and spend $20,000 on a car, because that’s the sort of money we’d have to borrow.”
“We just need to consider it very carefully with our accountant.”
“But, being in the arts, whenever there’re cuts to the Australia Council or any sort of arts funding, arts based businesses suffer as well.”
“Once artists get grants they tend to spend it in music studios and things that they use to work their craft. That will have a greater impact down the track with us.”
Click here for the full article by the New Daily.
This content was provided by the New Daily. The views expressed are not necessarily those of First Super.
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