Michaelia Cash: Instant asset write-off extension on the cards ahead of MYEFO Christmas for SMEs

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Small and Family Business Minister Michaelia Cash. Source: AAP/Mick Tsikas.

The upcoming mid-year economic and fiscal outlook (MYEFO) is shaping up to be a Christmas stocking for small businesses, with the government planning to unveil a suite of new policies to round out its SME agenda in the lead up to the 2019 election.

Minister for small and family business Michaelia Cash says the government is considering whether to again extend its instant asset write-off scheme in the lead up to the mid-year update.

Speaking to SmartCompany on the sidelines of preparation for American Express’ shop small event in Melbourne today, Cash said MYEFO would include a “very strong small and family business package”.

Cash also believes small business needs a “one-stop shop” to help them access information on government policies, amid concern most SMEs aren’t utilising its asset write-off scheme.

“They need a one-stop shop … one point of access that you can go to that will enable you to access information that’s relevant to you,” she says.

The government has billed the instant asset write-off as a cornerstone of its small business agenda, but ATO data shows only 350,000 of the estimated two million or more businesses eligible for the scheme accessed it in 2016-17.

Industry advocates have raised concern many business owners don’t know how the scheme works, with a recent American Express survey finding 47% of firms didn’t know about the write-off.

Calls for better communication

Australian small business and family enterprise ombudsman Kate Carnell has called on the government to work with ASIC and the ATO to improve direct outreach about the scheme.

“The dilemma for government is a chunk of the thing’s they’ve done, although really important, a lot of small businesses don’t know about them,” she tells SmartCompany.

“We’d like them to expand the project, but we also think they should be more focused on making sure small businesses know about it.”

While there are existing web resources for accessing policy information, there are complaints business.gov.au is difficult to navigate and not tailored to SMEs.

Cash says “any mediums” the government can use to improve awareness of its policies will be considered, but firms ultimately want “trusted advisors” like their accountants to keep them informed.

“It’s always important to say to your accountant: ‘What are the policies I’m able to access?’”

Accountants SmartCompany have spoken to have also called for better communication of the scheme and how it works, saying business owners who just speak to their accountant at tax time might be missing out.

“It’s the terminology people aren’t aware off, they think it’s something on top of the assets they’re already buying,” Healthy Business Finance owner Stacey Price told SmartCompany last week.

The current instant asset write-off scheme allows businesses with less than $10 million in turnover to write-off a purchased asset worth less than $20,000 in their tax return for that year.

The scheme was introduced in the 2015 federal budget and extended earlier this year to include the 2018 and 2019 financial years.

Consideration is also still being given to whether to expand the program to increase the turnover threshold or claimable amount.

Industry bodies like the Council of Small Businesses of Australia (COSBOA) are lobbying for the write-off to be made permanent, but Cash says that could dull its effect.

“The reason you have the instant asset write-off is to stimulate investment, if you make something permanent it doesn’t necessarily have that stimulatory effect,” she says.

Access to finance and tax dispute reforms under consideration

Cash says businesses will have to wait until MYEFO in the lead up to Christmas to find out about reforms that could make it easier for firms to access finance.

There have been long-standing concerns it’s too difficult for SMEs to secure affordable capital, which has only intensified in the wake of the banking royal commission.

Cash says she’s discussing the problem with Prime Minister Scott Morrison and Treasurer Josh Frydenberg but would not elaborate on any specific measures.

“We’re looking at a number of policy options,” she says.

Carnell has been pushing for the creation of a commercial growth fund to support high-potential businesses that need capital to scale, but the government has yet to officially lend support to any such program.

Discussions are also taking place relating to simplifying the dispute resolution process between business and the ATO.

Assistant Treasurer Stuart Robert confirmed late last month reforms to make the process easier were being considered in the lead up to MYEFO, following a Four Corners investigation revealing allegations of “bullying” by the ATO earlier this year.

Cash says small businesses want an independent dispute resolution process that sits outside the ATO and is easy to access.

NOW READ: “Market failure”: Government considers policy to improve small business funding

NOW READ: The push is on to make $20,000 instant asset write-off scheme permanent for small businesses


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Michael Ratner
Michael Ratner
3 years ago

I don’t want to look a possible gift horse in the mouth and while there has to be some merit in the thought process of Michaela Cash – reading between the lines I reckon she has asked around, got some feed back and that allows her to be seen as doing something.
Of course a lot of businesses aren’t taking advantage of the tax write off. Besides the possibility of them not knowing about it the actual fact that is they don’t have the cash flow to make use of it.
Kate Carnell has a better feel for small business. If only she had more clout but all this is just spin – sort of optimistic something for the election that is due.
Our cost of living is too high based on the government continuously looking for breathing space to siphon more money out of the economy.
Keep finding things to tax. This list only increases and things to rebate just never happen unless they are inconsequential.
The first step is to create a pool of let’s say $5 billion a year that available for business that drive the economy and is available at a competitive rate … that go to people or businesses that qualify. Yes there will be some desperadoes and relatives of Ned Kelly who will have their hands out but there will also be more that will really get things rocking.
Worst case scenario – the $5billion is written off every year but there will be lot of movement that will be generating more jobs, better wages, extra taxes and GST and the list goes on.
New businesses will be more prepared to have a go using whatever they can scrape together because should they be winning there might be capital available to them and existing businesses who are running with all of the owners capital already in them are locked in because there is just no where to get any extra capital.
Time to reinvent the wheel.

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