Government recognising the importance of the SME sector
For too long SME businesses have carried the load of driving Australia’s economy without getting the recognition from government it deserves. This is now changing under the current Government.
The extension of the $20k instant write off to businesses turning over up to $10m should stimulate considerable additional investment. This can be powerful because each qualifying investment benefits two businesses. Firstly, it benefits the business that is selling the investment asset and this is growing the economy. Secondly, it benefits the investing business as they can reduce their tax by up to $6k in that year. Of course, this benefit is only worth having if the investment provides a return for the business as well.
There are other benefits in the budget for the SME sector including the reduced company tax rate and some compliance streamlining, but the start up sector seems to be underwhelmed by the lack of bigger initiatives to help drive this sector and foster “entrepreneurship” as a career path.
Powerful job creation in the SME business sector
Nevertheless, the increasing emphasis on supporting the SME sector is exciting. To the extent it builds confidence in this sector we will see more job creation and more innovation. As I was watching the budget review on Sky Business last night I was staggered at some statistics on job creation quoted by Andrew Charlton of AlphaBeta Advisory. He noted that 1 million jobs had been created in the past 10 years. Of these, 1.4 million had been created by SME businesses while 0.4 million had been shed by big business.
We all need to get behind SME businesses. Australia’s economy relies on them. At the Association of Virtual CFOs, we have a membership base that are making a real difference for SME businesses. As SME businesses recognise the value they can get from working with a virtual CFO, success rates can only improve. This will further increase the level of job creation and wealth generation from this most productive part of the Australian economy, the SME business sector.
3S Synergy Group