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Small businesses get boost from new Federal Budget

How will tax changes help drive small business growth.

Small businesses have an important influence on the Queensland economy and that of Australia in general. With the government announcing a new economic plan for the 2016-2017 Federal Budget, it is expected that they will receive a significant boost.

As small companies in Brisbane reap the benefits of the changes, they may engage in more commercial contracts and thus will need the expertise of a local lawyer to ensure growth occurs smoothly.

The government is set to provide a number of benefits for small businesses.

Newest Budget set to bolster smaller companies

According to the Queensland Government, there are around 405,000 small companies operating in the state, making up a large portion of the local organisation. It also says that smaller companies form 97 per cent of businesses in the entire country. It is apparent how essential small businesses are nationwide, as well as locally in Brisbane.

As such, changes announced with the latest Budget are aimed at improving conditions for this segment of the business environment, promoting a number of benefits for affected organisations.

The Treasurer of the Commonwealth of Australia, Scott Morrison, detailed these changes in a speech at the beginning of May. Starting on July 1, the tax rate for small businesses will be reduced from 28.5 or 30 per cent to 27.5 per cent. There will be an increase in the turnover threshold as well, pushing up from $2 million to $10 million.

In addition, businesses with a turnover of less than $10 million will also be allowed an extended tax write off for equipment purchases of up to $20,000. These changes represent a shift in the way small businesses are treated in Australia, providing promising conditions for advancement.

Small business will soon see a significant tax cut.Small businesses will soon see a significant tax cut.

What does this mean for small businesses in Australia?

Much of theses developments are owed to the government recognising the influence that small businesses have.

"Small and medium businesses are driving jobs growth in Australia and must continue to do so," said Mr Morrison in his speech.

There will be a number of positive outcomes for small-scale companies, including increased access to tax incentives and a greater retention of revenue.

Taxation and Services Direct at Bentleys accounting firm Jon Carcich highlights the positive impact of the new Budget.

"You will have less tax to pay, and therefore you're going to have more money to pay off debt, hire more people. The benefit is freeing up cashflow," he said in an article for the Sydney morning Herald.

With the government's ambition to help small businesses develop and expand, it's essential that businesses taking advantage of the improvements consult a Brisbane lawyer about their commercial agreement and other growth related activities.