TAX breaks for small and medium businesses, and measures to boost youth employment were commendable highlights of a “supportive” Budget, the Central Coast NSW Business Chamber said today.
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The chamber’s regional manager Dan Farmer said local small and medium businesses had been “given the opportunity to grow, innovate and employ more staff” thanks to measures in the Budget.
“For some time we have been articulating the need to extend the threshold at which a small business pays the lower company tax rate, and the government has responded with very clear support for the small business sector,” Mr Farmer said.
“From 1 July, the small business company tax rate will reduce to 27.5 per cent, but more importantly, the turnover threshold increases substantially from an annual figure of $2 million to $10 million.
“The threshold extends each year up to $100 million by 2019-20, meaning that more businesses will benefit from the reduced company tax rate and more importantly, a company won’t be penalised for their ongoing successes.”
Mr Farmer said the Budget was overdue recognition of the importance of small and medium buisinesses.
“Australia is primarily a small and medium business economy but it has taken time for that to be fully recognised by our political decision makers,” he said.
“The federal government has rightly identified that sustainable jobs growth is going to be driven by the small business sector, and by providing a company tax rate cut this immediately provides small business owners the opportunity to employ those extra few staff members or take on an apprentice.
“There are, of course, multiple benefits to the national economy by giving a young person their first job or providing extra shifts for existing staff members.
“This will be particularly welcomed in regions like the Central Coast where there are traditionally fewer opportunities for business owners to make changes to their business operations, and with an unacceptable youth unemployment rate for the region.”
Mr Farmer said the government had answered the challenge issued by the national chamber movement’s campaign of 2013 entitled ‘Small Business: Too Big to Ignore’.
“I think it is fair to claim that, on the strength of the last two federal Budgets, the message was heard loudly and clearly by the federal government, and they have responded with practical measures that will support small business expansion and sustainability,” he said.
“The flow-on benefits from these changes also mean that more businesses are eligible for simplified depreciation rules, FBT exemptions and a trial of simplified BAS reporting, thereby reducing red tape compliance which is the number one bugbear of business owners.
“The Central Coast NSW Business Chamber also applauds a firm commitment to solving the youth unemployment crisis and welcomes the three-tiered approach of Prepare, Trial and Hire.”
The problem of youth unemployment had traditionally been addressed by governments as a peripheral issue, and no political party seemed prepared to single it out as an issue that needed specific attention, Mr Farmer said.
Measures to address youth unemployment announced in the Budget would take time to make an impact, he said.
“The Turnbull government seems to understand that reducing youth unemployment is a two-way street – not only do young job seekers need tangible support, but business owners require incentives to take on young and often inexperienced staff members,” Mr Farmer said.
“The three-staged approach involves preparing young job seekers to enter the workforce, an internship program enabling those job seekers to gain real work experience and at the same time receive additional funding from the government with businesses receiving an upfront payment of $1000, while the final stage sees further bonuses eligible for businesses who ultimately hire these new staff.
“This could be the circuit breaker on youth unemployment that business and community groups have been hoping for,” Mr Farmer said.