Kate Carnell talks small business initiatives for the Fed Budget on 101.5 2017-04-28
The Small Business and Family Enterprise Ombudsman Kate Carnell spoke to Keith Birks on a range of initiatives to help small business in growing their businesses ahead of the Federal Budget.
In particular measures to help grow small business with proposals extending the instant offset writeoff converted to tax breaks for small business to be extended and to increase the cap of 20,000 dollars
Also a mandatory code of practice for the banking industry as well as a national payments transparency package
Small business makes up 30 % of GDP and over 50% of the workforce and its important that such business get paid quickly with government entities being asked to take the lead with payments to small business with in 15 days and to reign in the delays of big business paying small business from the current 90 to 120 day accounts to something a lot quicker.
The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) has proposed key policies for the 2017-18 Federal Budget to kick-start small businesses growth, create more jobs and promote more transparent and fairer relationships with banks and big businesses.
The ASBFEO Kate Carnell said the Australian Government should consider a range of policies to boost small business, which accounts for 33 per cent of Australia’s GDP and employs about 50 per cent per cent of the workforce.
“We want the Australian Government to consider these measures as part of its Budget on 9 May because a healthy small business sector is a prerequisite for a growing economy with high employment opportunities. In every sense, small business counts,” she said.
The ASBFEO is calling for a range of measures in the Budget, including:
- Extend the instant asset write-off scheme and consider lifting the threshold above $20,000
The ASBFEO says that the $20,000 instant asset write-off should be extended past June 30 this year when it is scheduled to end. Also, consideration should be given to lifting the threshold because for capital-intensive businesses it is too low. For example, if you’re a farmer and you want to buy an asset like a tractor, you’re not going to get one for anywhere near the $20,000 threshold.
The instant asset write-off program allows small businesses to immediately deduct assets costing less than $20,000 instead of claiming deductions over a number of years. It is on a per asset basis allowing several assets costing less than $20,000 to be deducted.
- Mandatory code of banking practice
The Ombudsman has also called for legislation to implement a mandatory code of banking practice with compliance a condition for a banking licence. The code would be overseen and enforced by the Australian Securities and Investment Commission (ATSIC).
This is to restore confidence among small businesses, improve banks’ small business lending practices and provide a safeguard against misconduct. This would include establishing an ASIC Small Business Commissioner with powers to monitor compliance with the code, investigate and take action against breaches of the code.
The ASBFEO also calls for banks to be prohibited from applying non-monetary default terms on small business loans of up to $5 million that are financially compliant. It also urges the Government to implement the recommendations of the ASBFEO’s recent Small Business Loans Inquiry.
- National Payments Transparency Register
The Ombudsman also calls for the establishment of a National Payment Transparency Register to monitor independently payment times and practices. This follows the ASBFEO’s recent Inquiry into Payment Times and Practices, which found widespread evidence of small businesses being squeezed by multinationals’ late and extended payment practices.
The Register would require the top 100 ASX companies and multinationals to report on their payment times and terms to small business and encourage other businesses to register. This would increase transparency around business behaviour and expose bad practice.
- The Australian Government introduce 15-day business payment time
The Australian Government can set an example with faster payment times to suppliers by adopting a 15 business day payment time requiring its head contractors to adopt the payment times through its supply chain.
The Australian Government would procure from businesses that have supply chain payment times and practices equal to or better than its practices.
The United Kingdom and United States governments have implemented fast payment requirements with demonstrated economic benefit by freeing-up cash flow and stimulating jobs, investment and growth.