Politics is a funny game. I’m not involved with any political party but as a part of my job I interact with politicians. At times it seems like a secret society that interacts with and relies on the private sector for its existence, but exists with a degree of separation and autonomy from the rest of us.
As such I find politics very difficult to read. Ideas gain momentum and can be all the rage; and then – sometimes sadly, sometimes gladly – many of them fall by the wayside. So it’s with a sense of cautious excitement that I say WOW – who would have thought one month ago that so much focus from the Federal Government would be placed on SMEs and such credible ideas would be put forward?
Let’s recap what has happened:
- The Minister for Small Business has been given a place in Cabinet. This is something that many of us have been arguing unsuccessfully for years. Most decisions are made at the cabinet table and having an advocate for small business in all those conversations is critical.
- Last week the Prime Minister announced a national Small Business Commissioner will take office in 2013, joining state-based commissioners that have been in place for some time. In making the announcements the Prime Minister said the Commissioner’s Office will act as a one-stop shop to advise time-poor small businesses about government policies and programs and will act as an advocate for small business within the government. This is a great step forward.
- Business taxes are to be cut for small business, despite the federal budget challenges and the fact big business is not getting a tax cut. While I don’t believe cuts in the corporate tax rate will do much for small businesses (first because only 1 in 3 SMEs are incorporated and second because most small business owners end up paying tax at their personal, marginal tax rate), I do think the fact the needs of SMEs have been specifically singled out and have not been treated as the poor cousin to large corporations is a great sign.
- There have been conversations started around a new type of business entity that would have some of the tax benefits of a company, but the simplicity of trading as a sole trader. This is a fantastic idea that would really make life easier for many business owners.
- Finally, there have been further conversations around the idea of SMEs being able to receive a loss carry-back on their taxes. This means if you’ve paid tax in the past and make a loss this year, you’ll actually get a payment back from the ATO rather than just be able to carry that loss forward to offset against future profits. This is a huge step forward to help SMEs with cash flow challenges when things are tough. Generally at this time of year these ideas are only circulated if there is a chance they will be included in the upcoming budget – we’ll see if that holds true this year.
While I’m cautious in my optimism, the political world seems to have moved closer to the real world of SMEs. I give the Prime Minister and her team kudos for what has happened to date – let’s hope we get some further wins in the budget.
What are your thoughts on the recent announcements?