The Federal Budget was handed down last night and as always there is a lot of detail to get through. However, one of the headline acts was support for small business through a 1.5 per cent tax cut, the ability to claim sub-$20,000 purchases as tax deductions through accelerated asset depreciation.
This means that any purchase made by a small business – whether a company or private operator – up to the value of $20,000 can be instantly ‘written off’.
As the threshold used to be $1,000, this is a huge windfall for small businesses.
The motive for this is clear. The government wants entrepreneurs to invest in business assets to spur growth in the economy. This should see jobs rise and economic confidence increase.
It’s a very generous concession and, as someone who has always been active in small business, it has my full support.
As you can imagine, this week is always a very busy one in parliament and I have scarcely had a moment to digest all the budget measures but it appears to have been received more warmly than last year’s.
It also underlines the challenge facing the government. They need to keep spending in check to redress the deficit whilst keeping the economy afloat.
As I mentioned last week, I expect that some very strong economic headwinds will hit the global economy in the years to come. In the circumstances I envisage it won’t be government that will be keeping the economy strong, the heavy lifting will be done by the private sector.
That means we need a legislative agenda that supports small business. Last night’s budget goes some way to doing exactly that.
Cory Bernardi is the author of seven books and has been a member of the Australian rowing team, a publican, an investment portfolio manager and spent nearly 14 years as an Australian Senator.
