Small Business urged to plan for tax cuts

MEDIA RELEASE
3 February 2012

Minister for Small Business Mark Arbib today reminded small businesses about the important changes being introduced to help them improve cash flow and reduce red tape.

A recent survey commissioned by Telstra Business and the Council of Small Business of Australia (COSBOA) revealed many businesses weren’t aware of the Federal Governments tax cuts.

Senator Arbib said the Government was delivering important changes this year which will help small businesses by allowing them to plan their capital purchases and maximise cash flow.

“From 1 July this year we are changing the asset write off provisions for all small businesses and the changing depreciation arrangements for other assets – saving time, money and paperwork,” Senator Arbib said.

“This means small businesses will be able to immediately write off all new assets valued under $6,500.

“If a small business buys a computer for $3000, they can immediately write off the cost of the computer. This means the business can claim a deduction for $3000 in the first year in its tax return, as opposed to $450 in the first year under the current arrangements.

“In addition they will be able to write off up to $5,000 for new motor vehicles, meaning increased cash flow.

“A tradesman on a 30 per cent marginal tax rate buying a new $33,960 ute would receive an extra benefit of $1,275 in the year they purchased it. The rest of the purchase value can be transferred into the general small business depreciation pool, which will be depreciated at 15 per cent in the first year and 30 per cent in later years.”

Senator Arbib said the government understood how hard small business owners worked and often don’t have the time to read the papers or visit government websites to find out this important information.

“In my discussions with small business owners a common concern is the flow of information,” Senator Arbib said.

“I have made it a priority to improve this and will be working closely with peak industry bodies to ensure this information is passed on to small business owners in the most efficient way possible.”

Senator Arbib said the community must not forget that small business owners are people who put all their effort into running their business. They deserve strong support.

“The Government is committed to supporting Australian small businesses and will continue to work closely with the sector to ensure further growth,” Senator Arbib said.

Minister Arbib’s media contact: Sean Sammon 0417 137 419