Stronger, fairer, simpler – crikey that’s good for SMEs
Australia – we are winning. The Government today confirmed it plans to implement some of the recommendations from the Henry Review on tax, and wow they are leading edge (hence the slogan stronger, fairer, simpler…). As we know Australia has a lot of natural resources and the government has decided to tax the resources sector more heavily and tax our good friends the small business sector less. A very, very smart move as far as we are concerned. It’s likely there will be a corporate tax rate reduction to 28% for SMEs, effective in the 2012/2013 financial year. This will release some of the pressure on SMEs, allowing them to take a breath and think about growth. Genius.
The other biggie (which we wish other OECD countries would adopt) is a $5,000 write-off allowance for fixed assets. It will save so much administration time accounting for small assets, which now can be written off at time of purchase. Brilliant.The Hon Wayne Swan is coping a lot of flack from big business with their significant PR clout, but the unsung heroes of the Australian economy, the Mum and Dad business owners, will be singing his praises. A lot of noise is being made about the effect on jobs in the mining industry and fair enough, but if an economy can grow and develop its SME sectors, the employment prospects are massive, even bigger than mining. The social impact of breeding a society of entrepreneurs (who need employees) will last far longer than mineral deposit. For example look at the result of the coal mine closures of England and Wales. Some of those communities are only just getting back on their feet now and the UK Government had to develop significant retraining and investment in the SME sector. The UK ate all it made from North Sea oil, leaving no financial asset or natural resources for future generations. Norway on the other hand invested all the revenue generated and has quietly become a very wealthy nation.
If this is a sign of things to come, we eagerly look forward to the release of the Budget next week. AND if you are listening Kevin (Rudd) or Wayne, can you please drop individual income tax returns just like New Zealand has done…the accountants hate doing them and charging for it.
You can read the executive summary of the Henry Review here.