The Institute of Public Accountants has praised the government for continuing its support of the nation’s SME sector in last night’s federal budget.
In a statement, IPA CEO Andrew Conway said he was pleased to see the government build on initiatives announced in last year's budget and offer support to a wider net of SMEs.
“Last year’s budget delivered some steps in the right direction with tax cuts and asset write-offs, and this year the government has kept to their word when it comes to supporting the most critical sector of our economy,” Mr Conway said.
“A further reduction in the income tax rate for small business (from 28.5 per cent to 27.5 per cent for 2016-17) combined with an increase in the eligibility turnover from $2 million to $10 million for incorporated businesses will be well received by an additional 90,000 small businesses.
“They will also be eligible for other small business tax concessions (including the $20,000 instant asset write-off),” he said.
Mr Conway stressed that unincorporated small businesses will not completely miss out, with benefits to be extended thanks to an increase in the eligibility turnover threshold from $2 million to $5 million per annum.
According to Mr Conway, addressing the ongoing issue of ‘bracket creep’ represents a positive development.
“Addressing the bracket creep issue is also a positive, with changes for those earning between $80,001 and $180,000 being extended to $87,000; this is good news for both individuals and unincorporated small business owners,” he said.
“We acknowledge that the government is relying on the ‘growth dividend’ from these measures to reduce the budget deficit. Until then, we are walking on a tightrope.”