“The Abbott Government is likely to pass legislation that rips away support for Australia’s small businesses,” Julie said.
“The Government’s legislation sets the deadline for the end of Labor’s small business assistance as January 1 2014.”
She advised small business owners considering buying equipment for their business that now may be the time to act. “If your business needs a vehicle, act now before Tony Abbott rips away Labor’s assistance.
“Before the election the Coalition talked and talked about how much they value small business. Australia’s small businesses are learning that when it comes to this Government, what you get is not what you voted for.”
A statement issued by Ms Owen says the son of “Anne from Northmead” was setting up his own business in Coober Pedy and had purchased a number of items, including a ute, that would qualify.
“I took your advice and made sure he talks to his accountant,” Anne told Julie. The statement went on to say that local accountant “Chris” had thanked Ms Owen for highlighting the change.
“I feel that many business people remain unaware of the changes to take place from January 1 and will miss the opportunity to take advantage of the current concessions before the rules change,” he said.
The Bill repealing the Mining Resources Rent Tax (MRRT) and the tax incentives directly linked to it, is presently before the Senate, but may still encounter difficulties due to opposition from Labor and the Greens.
Marlon Fraser, Partner and Tax expert with Moore Stephens in Parramatta, encouraged small businesses to take advantage of the existing rules before January 1.
“Small business operators will be most affected by these changes and will be disappointed to lose these tax concessions which have had a very positive impact on their cost of compliance and cash flow since the measures were introduced on 1 July 2012,” he said.
“For small businesses operators who can afford to do so, there is a window of opportunity between now and the end of the year to bring forward the acquisition of these business assets and lock in a cash flow benefit.”
Michael Croker, Head of Tax Policy at the Institute of Chartered Accountants Australia, said
small businesses would bear the brunt of the tax consequences flowing from the abolition of the mining tax package.
“The Institute is a strong advocate of a tax reform process which addresses the sustainability of the tax system. This could be seen as a political response to the piecemeal adoption of the Henry Review,” he said.
“But once the dust of the current election campaign has settled, the Institute hopes that all political parties will recognise the urgent need for a more collaborative effort on a tax reform process that addresses the long-term funding needs of government and the services it provides to the community.”
Meanwhile, leading business group the Australian Chamber of Commerce and Industry is hopeful that tax incentives will be retained in the May budget.
A Senate inquiry report into the repeal legislation supported revisiting taxation issues affecting small business "once the budget returns to strong surplus".
“Decoupling small business tax relief from the mining tax, and funding it via efficiency savings in next year's federal budget following the commission of audit, would be the right policy approach," ACCI chief executive Peter Anderson said in a statement.
Anglicare Australia executive director Kasy Chambers said each measure in the MRRT package should be assessed on its own merit as their abolition will have a devastating effect on Australia's poorest households.
"These are very important measures for those on the lowest incomes, the majority of whom are women who should be encouraged to save for retirement, and those receiving government payments," she said.
What are the changes?
The Abbott Government is legislating to repeal the increase in the small business instant asset write-off threshold. The existing Labor policy allowed for the immediate write off of (each) asset costing less than $6,500. The new legislation changes the threshold for the cost of (each) asset to $1,000. The legislation also repeals the special deduction in respect of motor vehicles for small business entities. Under Labor, small businesses could claim up to $5,000 as an immediate deduction for motor vehicles, new or used, costing $6,500 or more.
