There were relatively few new initiatives for Family Business announced on Budget night but this is due to the Government’s action in its response to the Henry Tax Review when it provided for reduction of the corporate tax rate from 30 per cent to 28 per cent effective July 1, 2012. In addition, assets costing less than $5,000 can be depreciated at a 100 per cent rate, from July 1, 2010.
Specific announcements in the Budget are:
- Creation of a single national online registration system for business names and Australian Business Numbers, ensuring that businesses will no longer need to be registered in each State and Territory. Over $125 million has been provided to get this initiative fully implemented in eight years;
- Small businesses that account for GST on a cash basis will be allowed to claim input tax credit upfront in relation to hire purchase agreements;
- Nearly $ 3 million has been provided to give better access to mediation for businesses which operate under the Franchising Code of Conduct, the Horticulture Code and the Produce and Grocery Industry Code; and
- Training, apprenticeships and adult literacy and numeracy programs over the next four years will cost over $650 million but will provide 70,000 new training places over the next four years in high-demand sectors, plus support for 22,500 apprentices.
The overall economic strategy of the Budget will provide a very strong basis of economic recovery and consequently demand for the private sector. Forecasts for growth are 3.25 per cent in 2010-11 and an impressive 4 per cent in 2011-12. By 2011-12 the economy will be back to a pre-GFC growth rate much faster than all other developed economies will reach close to full employment with a predicted unemployment rate below five per cent.
This will mean that the private sector is expected to grow fast and to resume investment spending.
The strength of the economy is reflected in the fact that our government debt to GDP ratio is expected to peak at 6 per cent compared with 125 per cent in Greece and 68 per cent in the UK and well below all other developed economies.
The Budget provides for increased spending on infrastructure and health care – items which should boost future productivity and efficiency.
Overall the Budget provides the basis for sustainable growth, a rapid resumption of high growth and a return to full employment.