Budget 2015: Grab Joe’s cash and let’s get spending after Hockey’s small business tax break

THE small business revolution has begun. Now Joe Hockey hopes the jobs revolution will follow as the money from his small business tax breaks starts to flow through the economy

THE small business revolution has begun. Now Joe Hockey hopes the jobs revolution will follow.

As of 7.30pm last night every small businessperson in the country has been given a potential $20,000 tax write-off as part of an unprecedented $5.5 billion push to breathe new life into the economy and put a rocket under jobs growth.

TREASURER JOE HOCKEY JUMPSTARTS AUSTRALIA’S ENGINE

WORKING PARENTS WITH CHILDREN ARE THE BIGGEST WINNERS

The Treasurer unveiled a new immediate tax deduction for any asset purchased by a small business up to $20,000. How immediate? It took effect from the very second he rose to his feet to deliver the Budget at 7.30pm last night.

Treasurer Joe Hockey sells his budget at the Budget Lock-up media conference. Picture: Ray Strange

The $1.75 billion fast-tracked tax deduction is on top of a 1.5 per cent tax cut for up to 780,000 small companies and up to $1000 tax back for a further 1.7 million operators.

Mr Hockey’s 7.30pm kick-off was a pointed declaration that he wanted the nation’s more than two million small businesses to get spending straight away and plunge money into the retail sector — the fastest way to stimulate the economy.

TREASURER JOE HOCKEY PUTS AWAY HIS BIG STICK

As well as small businesses, who could be about $5000 better off per deduction, retailers such as Harvey Norman, Officeworks, Bunnings and other business suppliers will be the big winners.

Combined with the other tax cuts and employment incentives, Mr Hockey is hoping for a small business-led recovery to lift the economy out of the mining gloom and drive unemployment back down under six per cent.

The Budget drives home the fact that small businesses employ more than 4.5 million people and produce more than $330 billion of GDP and particularly that, while manufacturing and mining might be slowing in Australia, Australians started more than 280,000 small businesses last year.

They are, the Budget has formally declared, “the engine room of the Australian economy”.

“Our future growth will come from growing small business into big business,” Mr Hockey said.

“Every big company in the world started small.”

Speaking to the new $20,000 tax deduction threshold, which can be claimed repeatedly but is only available until 2017, Mr Hockey made no bones about how quickly he wanted business to move.

“From 7.30pm tonight, small business can claim an immediate tax deduction for each and every item they purchase up to $20,000,” he said. “We also want Australians to start a new business, and we want them to grow. Why? Because new businesses create new jobs.”

Treasurer Joe Hockey’s Budget speech is applauded by his colleagues. Picture: Kym Smith

The 1.5 per cent tax cut for incorporated small businesses takes their rate down to 28.5 per cent and will cost $1.45 billion. Another five per cent discount on tax paid by up to 1.7 million tradies and sole operators, up to a total of $1000, will cost the Budget $1.8 billion

There will be $40 million spent on cutting red tape. Combined with the government’s employment package, it represents a $5.5 billion spend, which the government says is the biggest small business package in Australia’s history.

The news was welcomed by BCA Chief Executive Jennifer Westacott who described the budget as “a shot in the arm to small business (which) creates a better environment for business confidence that will drive investment, job creation and economic growth.”

Stu White and Jodie McGregor at their florist shop in Annandale. Picture: Toby Zerna

Confidence blooming for the future

Sarah Crawford

THE 1.5 per cent tax cut for small business and the new $20,000 tax write-off on assets has shop owner Stuart White blooming with optimism.

The florist from Sydney’s inner-west owns Jodie McGregor Flowers, named after his partner and
co-owner. The couple opened the business 16 years ago “on the smell of an oily rag”, Mr White said.

“A significant tax cut would be wonderful news. We are expanding and growing our business and this will encourage us to fast-track things and look for people immediately. It will also give us the confidence to bring forward other investment decisions.”

Mr White also said the tax write-off for all new assets under $20,000 would encourage him to upgrade the florists point of sale technology as well as buying new fixtures for the shop.

Mr White said he would also consider taking on a young unemployed person for four weeks’ work experience with the option of employing them afterwards on a government-subsidised wage.

Mr White said, despite pessimism in the industry, their shop was flourishing with the couple investing in two new subscription services called JodieVIP and Emergency Flowers.

“We’re always looking to improve,” she said. “A lot of florists are talking things down and it seems corporates are a little reticent but we are seeing a lot of high value individual orders coming through, so there are people prepared to spend.’’