Wednesday, 09 May 2018 11:26

Black economy crackdown helps small business: Reckon Featured

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Black economy crackdown helps small business: Reckon Image courtesy of jk1991 at FreeDigitalPhotos.net

Accounting software group Reckon says federal government measures in the Budget to crack down on the black economy help to level the playing field for small businesses.

Reckon managing director Sam Allert (below, right) claims the continued crackdown on the black economy is a positive way forward and, overall, if Australia can reduce the black economy or tax evasion, then everyone benefits.

“If everyone, including big businesses like global companies who move money offshore, all paid the correct and fair tax then we would be able to reduce tax rates, and offer many more incentives for small and medium sized businesses," he said.

And on the government’s announcement on instant asset write-offs, Allert says small business owners would like the government to extend the write-offs.

“According to our survey of 1000 small business owners, 91% say they’d like the government to extend the instant tax write-off beyond 30 June 2018. However, over one in three (39%) respondents have yet to utilise the incentive, indicating the potential need to better educate Australian small businesses on what they can and cannot write off,” Allert says.

sam allert reckon chief“Any further tax relief for small businesses is always welcomed, as it means they would have more resources to create jobs, expand, and purchase technology and equipment to boost productivity. The $20,000 instant asset write-off is evidently a worthwhile incentive, so it’s promising to see the government extended the initiative. As a next step, it should ideally be enshrined in permanency.”

On Australia’s increasing costs for electricity, Allert said “any further support that can be afforded to small businesses will go a long way in ensuring they remain profitable and thrive”.

“For one, the massive electricity price hike over the past several years has been crippling many small businesses across the country. In fact according to our survey, over half (53%) want the government to better support them by lowering the cost of doing business, specifically via a reduction in electricity price (53%).

“If the government doesn’t step in to address the issue, it will have huge implications on small business growth as capital that could have gone into hiring new talent, investing in new technology and expanding their venture, would now have to go into solely ensuring they have an operational work space.”

On corporate tax cuts, Allert says the reduction of the tax rate is a positive step forward, “but there is clearly more work to be done to actually allow small businesses to reap any positive financial benefits and ultimately create more jobs”.

“According to our survey, only 14% have seen an improvement in cash flow with the lowered tax rate, while a mere one in 10 (10%) have managed to bring in more staff.

“It is no secret that Australia’s high company tax rate is a massive inhibitor to business growth. We are already seeing instances where local entrepreneurs are driven to set up shop overseas, and it is only a matter of time before the rising costs of running a business force more of our own away. With nations like the UK having a rate of 19% and the US at 21%, further reforms are critical to promote small business growth and ensure Australia remains competitive on the global stage.”

Here’s what Allert had to say, from a small business perspective, on other aspects of the Budget:

Personal income tax cuts

“Personal income tax cuts was of massive focus in this year’s Budget. We are pleased with the government’s decision to reduce tax rates over a seven-year plan. With a degree of income tax cut, low and middle wage earners in particular will have a higher purchasing power, which will go a long way in stimulating local economic activity especially amongst small business retailers.”

Taxable payments annual report

“With the latest changes to the TPAR (Taxable Payments Annual Report), this will present additional red tape for small businesses to comply with. In order to ensure minimal implications to their operations, small business owners must make sure that they have the right technology and software in place to deal with the additional reporting requirements and ensure compliance.”

Small business training and upskilling

“While tax cuts will go a long way in helping small businesses improve their cash flow, today’s pace of technological change has also meant that there’s a seemingly ceaseless demand for new skills. I think it’s very important that as a country, we start fostering a strong culture of lifelong learning, so small business owners are able to continuously develop the skills they need to succeed.”

“To help small businesses stay ahead of these digital disruptions and prepare for the unknown, more assistance and frameworks must be afforded to them in the form of ongoing education, training, upskilling and reskilling. In our survey of 1,000 small business owners, one in three (35 per cent) say they’d like the government to better support them by offering more subsidies for training and upskilling programs.”

Minimum wage increase

“Small businesses are and will continue to be the engine room of the Australian economy, so it is vital that they are provided with ample support to remain profitable whilst spurring growth. According to our survey, over half (56%) indicated that the increase will affect their operations if it went ahead, while 66% want the government to step in to address the minimum wage debate.

“More alternative initiatives combatting the wage rise need to be set in place – with the Sunday penalty rates cut, governments and businesses need to work closely together to ensure everyday Australians are paid a wage in line with the cost of living.”


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Peter Dinham

Peter Dinham - retired and is a "volunteer" writer for iTWire. He is a veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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