In the ACT there are 30,000 businesses who provide two thirds of Canberra’s jobs. The 2020 Federal budget recognises that supporting those businesses, and particularly small business – the engine room of the economy – is critical to jobs and our economic recovery.
The Budget includes a number of new, extended and existing measures to support business:
Asset investments: Almost all ACT businesses will be able to write off the full value of any eligible asset purchased, which means businesses can more easily buy equipment and take a risk in order to grow.
Business tax losses: Allowing companies to offset losses against prior year profits will also help a range of local companies who have been unable to operate profitably as a result of COVID19, unlocking much-needed funds and providing immediate financial support.
New JobMaker credit scheme: This will provide an incentive for business to hire young people, and the 50% wage subsidy for new apprentices and trainees is welcome news. It will help to turn around a decline in apprenticeship numbers, and comes on the heels of the government committing to growth in the overall investment in vocational education and training.
Income tax: Personal income tax cuts will be backdated to 1 July 2020. This will let households keep more of their own money to spend, and that money should find its way into our local economy and businesses.
Fringe benefit tax improvements for small business: There are 3 main changes for businesses turning over less than $50m a year. As from next April 2021, small businesses will be to provide FBT-exempt car parking, and multiple work-related electronic devices (mobile phones, laptops, etc) to their employees (currently this is limited to only one device of its kind each FBT year). The need to keep travel diaries and declarations may be replaced by existing company records. There are also new training and reskilling FBT exemptions. These are welcome moves.
Mental health: There is a national $4.26 million budget commitment to roll out a new mental health program for small business owners. The NewAccess for Small Business service will provide small business owners with access to free one-on-one telehealth sessions with specially trained mental health coaches
What’s missing? For the ACT economy there are some notable omissions, including infrastructure investment in social housing and support for the university sector. We also need to continue to lift interstate and international border restrictions to encourage people to travel and move to the ACT.
As with any budget, talk to your accountant to find out more about what your own business can claim. If you’re looking for an accountant, the Chamber can provide you with a list of local accounting firms that are also Chamber members.