All of a sudden it appears that politically and economically our sector is being recognized as an important part of the economy and capable of making a positive contribution to the “jobs and growth” plan of the Government.
First the RBA announced an interest rate cut. That’s hardly news any more but, to the extent that it allows those with home loans the opportunity to reallocate some spending capacity, there will be some benefit to small businesses.
The exciting news for small businesses was that the banks very quickly and very publically vowed to pass on the cut to small business borrowers. Now we know that rate cuts are not always passed on for home loans but, for business loans, rate cut reluctance is an even bigger problem.
The (very small) cynical side of me wonders whether the current political situation may have been a factor but, looking a gift horse in the mouth is a smelly activity so we won’t go there. The punchline is that small businesses and their customers have some interest relief and this may allow some growth opportunities.
And then there was the Budget. Again, small businesses were “looked after” to make sure we buy into the “jobs and growth” objectives.
Extending eligibility for the $20,000 equipment write-off allowance is an advantage for small businesses planning to grow. Almost 100,000 small businesses have already claimed under this concession.
A 1% tax cut for incorporated small businesses will also help cash flow. Unincorporated businesses will receive a discount of up to $1,000.
The interesting aspect of this budget was the redefinition of “small business”. Previously, an annual turnover greater than $2 million meant you were no longer a small business. This limit has been increased to $10 million so now there are a lot more small businesses eligible for these concessions.
And, locally we need to factor in the positive benefits that will flow from the upgrade of the Shoalwater Bay training facilities and the significant increase in troops coming to the area for training. This is the type of cash injection our economy needs as the benefits will be shared by many local businesses – not just the 2 or 3 (southern) businesses who are awarded the contracts.
For now, small businesses need to savor our moment of greatness remembering always that, just as autumn departs and we head into winter, so the small business appreciation season will pass and we will be forgotten until the world once again remembers it needs champions.