The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) welcomes the extension of the $20,000 instant asset write-off scheme announced in the Budget and a range of other pro small-business budget initiatives.
ASBFEO Kate Carnell also welcomed moves to hold banks to account and provide better access to justice for small business. She said the extension of the $20,000 instant asset write-off scheme from 1 July this year is a positive move for small businesses, which are defined as having a turnover of up to $10 million a year.
The instant asset write-off program allows small business to immediately deduct assets costing less than $20,000 instead of claiming deductions over a number of years. It is on a per asset basis allowing multiple claims for assets costing less than $20,000 to be deducted.
Carnell said: “We would have liked a lift in the $20,000 threshold for the instant asset write-off because for some industries, like farming, the $20,000 threshold is too low to enable them to purchase equipment.”
She said there were other Budget announcements that would result in greater accountability and transparency for banks’ dealings with small businesses.
Carnell welcomed the Government lifting the threshold for small-business loans and recommends that it be set at $5 million for financial services external dispute resolution to bring it into line with ASBFEO’s definition of a small-business loan – significantly higher than the banks’ limited definition of loans of up to $3 million.
Carnell said that there was disappointment that the Government had not taken the opportunity to set an example with faster payment times to suppliers by adopting a 15 business day payment time requiring head contractors to adopt the payment time through its supply chains because it would have a significant impact on cashflow and it has been shown to be beneficial overseas.
The Government also has not adopted ASBFEO’s call for a National Payment Transparency Register to independently monitor payment terms and practices following the ASBFEO’s recent Inquiry into Payment Times and Practices, which found widespread evidence of small business being squeezed by multinationals’ extended and late payment practices.
Carnell said, “We will continue to push on this and talk further with the Government on the benefits of businesses gaining the economic benefits of being paid faster which frees-up cashflow and stimulates jobs, investment and growth.”
Carnell also welcomed other measures that would require banks to be more accountable and transparent in their dealings with small business and open up competition in alternative sources of finance.