Big tax breaks for small business in the Federal Budget
AMID the gloomy economic outlook, Treasurer Joe Hockey has declared he wants small businesses to "have a go" - and this year's Budget has some incentives for them to do so.
The Budget has gifted small businesses both a 1.5% tax cut, and an invitation to go shopping - by making any purchases up to $20,000 immediately tax deductible instead of spread over five years.
"If you run a cafe, it might be new kitchen equipment, or new tables and chairs. If you're a tradie, it might be new tools or a computer for the home office," Mr Hockey said in his Budget speech.
Lismore Chamber of Commerce chair and "microbusiness" owner Ellen Kronen said the incentives looked good for local businesses, and she planned to invest in new IT equipment.
"It's a good opportunity to replace some of the equipment I have," Ms Kronen said.
"What I do rely on is technology, and I need to keep it up-to-date."
And to curb unemployment, the government has announced from November 1, eligible employers will receive $6500 if they hire someone either under 30, an indigenous job seeker or parent returning to the workforce - or $10,000 for anyone over 50.
Lismore Chamber of Commerce vice-chair Andrew Gordon welcomed the measures, saying supporting farmers, the unemployed and small business were especially critical in the Northern Rivers, which has a high unemployment rate, a substantial rural sector, and about 10,000 small businesses.
"It gives you the confidence someone is listening," he said.
However, local financial commentator David Tomlinson warned the incentives would only really kick into gear if businesses had confidence about the future.
"Businesses aren't going to employ more people just because they get a better tax deduction," he said.
"If the confidence doesn't stay very strong, then they probably won't do anything much.
Ultimately, there were bigger factors at play influencing the economy.
"You need consumers to get out there spending more, you need businesses to spend more, you need the world economy to pick up, and you need China to keep growing," Mr Tomlinson said.
Accountant Scott Johnson, manager at Crowe Horwath Lismore, advised businesses to be smart about when they were buying things and wait until the measures had passed legislation later this year.
He noted the primary sector measures wouldn't be introduced for another 12 months, so farmers should hold off doing any major jobs until then.