Only four days remain.
Come Saturday morning, the state of Australian business could be very different. And with good reason – this election is undoubtedly one of the more fascinating in recent history. Not only do we have a prime minister recently reinstated after a three year absence, but for the first time in years, small business has become a key focus.
Which means no matter what, SMEs are coming out of this election with at least something to show for it.
But there are still plenty of differences between the two parties.
While small business will no longer be the paymaster for either parental leave scheme, there’s plenty of promise either way. The Coalition has pledged for small business experience on various boards including Fair Work, while Labor has offered the ability to report GST yearly, rather than quarterly.
The Coalition has pledged a company tax cut of 1.5% – but has also scrapped $5 billion worth of tax concessions.
So with four days to go, there’s still plenty to decide. We’ve put together a last-minute guide to each party and their policies to help you weigh up your decision.
The government hasn’t pledged too much in the way of taxes, although there has been some relief thrown to small business in certain areas.
Labor’s main promise has been to reduce the company tax in the Northern Territory, creating a special economic zone. (A suggestion lifted from billionaire Gina Rinehart herself.)
The cut would bring the company tax rate to 20%.
For all businesses, Labor has pledged an increase in the instant asset write-off threshold to a massive $10,000 from its current $6,500 – a significant boost for any company buying plant and equipment.
Meanwhile, the carbon tax is also set to be eliminated next year and replaced with a floating price, while Kevin Rudd has promised there will be no rise in the GST.
Perhaps what’s more important are the cuts – Labor has scrapped a significant part of the Fringe Benefits Tax relating to salary sacrificing, which has wreaked havoc on car leasing companies.
The Coalition’s big promise is the 1.5% cut to the company tax rate, which Abbott has pledged. The promise also has a second effect – winning over small business. Under the Coalition’s paid parental leave plan, big businesses would suffer a 1.5% levy on profits.
Now, the 1.5% reduction means those larger businesses won’t pay any more tax than they currently do.
Tony Abbott has also said while the Coalition won’t raise the GST, the tax will still be part of an overall review. Anything can happen.
It’s also worth pointing out conservative states have started lobbying for reducing the low-value threshold – something which Labor has not moved to change. If the Coalition wins power, this is almost certainly an issue that will rear its head in the first six months of government.
However, there are some caveats. The Coalition will scrap the increased asset write-off threshold to its original $5,000, and get rid of the rapid depreciation rules as well.
So far, Labor has promised some changes to red tape that have been called on by small business for years.
Firstly, businesses with fewer than 20 employees will no longer act as paymasters for the paid parental leave scheme. Those payments will be handled by the government.
And as a bonus, businesses with up to 100 employees can access the Superannuation Clearing House, which makes super payments on behalf of companies, freeing up some time.
The bigger announcement is that Labor will no longer require businesses to register a Business Activity Statement every quarter – the requirement will change to just one a year.
The Coalition has made red tape a big part of its pledge to small business. Tony Abbott has set a goal of saving $1 billion every year by eliminating unnecessary expenses, and has even said a Coalition would set aside two sitting days for getting rid of regulation.
The paymaster requirement for parental leave would be erased under a Coalition, while environmental regulations have also been targeted by erasing duplicated laws between the states and federal government.
Public servants will have their bonuses tied to deregulation under the Coalition, each department will be required to create a unit for getting rid of red tape, while the Office of Prime Minister and Cabinet will oversee deregulation duties.
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