Small business owners and operators can expect to see some changes to the tax system in next month’s federal budget, but Prime Minister Malcolm Turnbull has warned the May 3 budget will “not be about a fistful of dollars”.
“It will be about prudence, fairness and responsibility for our future generations,” Turnbull said in a speech to the Victorian Liberal Party Council on the weekend.
While the 2015 federal budget contained what the government claimed was “the biggest small business initiative in our nation’s history”, it’s not yet clear if small businesses will be among the budget winners this year.
Turnbull did not specify what form the “changes” to the tax system would take, but said the aim of the changes will be to “generate jobs and growth; promote investment, innovation and enterprise”.
“But overarching all of this, however, is a fundamental truth – governments at all levels, and all Australians concerned for the future economic security of our country, have to accept the reality that we must live within our means”.
Turnbull said the government is focused on improving economic growth and “excessive taxes, excessive debt, serve as a handbrake on economic growth”.
What small business wants to see in the budget
Peter Strong, chief executive of the Council of Small Business of Australia, told SmartCompany small businesses would like to see a change to vocational education and training in the budget.
“There’s billions of dollars spent there, and it’s spent poorly,” Strong says.
“So you don’t need to increase the funding, just spend it better. We hope industry has a better say in which training providers provide training for their industry.”
In addition, Strong says COSBOA has put forward a proposal that would see small businesses pay little to no tax if they keep their profits within the company structure.
“The ones that will do that are the ones that will grow,” Strong says.
“They can use that money to leverage loans and that sort of thing. We believe the impact on the budget would be very small, as not many small businesses pay tax through a company structure.”