Michaelia Cash: Instant asset write-off extension on the cards ahead of MYEFO Christmas for SMEs
Another extension of the instant asset write-off scheme is on the cards ahead of MYEFO, small business Minister Michaelia Cash says.
The upcoming mid-year economic and fiscal outlook (MYEFO) is shaping up to be a Christmas stocking for small businesses, with the government planning to unveil a suite of new policies to round out its SME agenda in the lead up to the 2019 election.
Minister for small and family business Michaelia Cash says the government is considering whether to again extend its instant asset write-off scheme in the lead up to the mid-year update.
Speaking to SmartCompany on the sidelines of preparation for American Express’ shop small event in Melbourne today, Cash said MYEFO would include a “very strong small and family business package”.
Cash also believes small business needs a “one-stop shop” to help them access information on government policies, amid concern most SMEs aren’t utilising its asset write-off scheme.
“They need a one-stop shop … one point of access that you can go to that will enable you to access information that’s relevant to you,” she says.
The government has billed the instant asset write-off as a cornerstone of its small business agenda, but ATO data shows only 350,000 of the estimated two million or more businesses eligible for the scheme accessed it in 2016-17.
Industry advocates have raised concern many business owners don’t know how the scheme works, with a recent American Express survey finding 47% of firms didn’t know about the write-off.
Calls for better communication
Australian small business and family enterprise ombudsman Kate Carnell has called on the government to work with ASIC and the ATO to improve direct outreach about the scheme.
“The dilemma for government is a chunk of the thing’s they’ve done, although really important, a lot of small businesses don’t know about them,” she tells SmartCompany.
“We’d like them to expand the project, but we also think they should be more focused on making sure small businesses know about it.”
While there are existing web resources for accessing policy information, there are complaints business.gov.au is difficult to navigate and not tailored to SMEs.
Cash says “any mediums” the government can use to improve awareness of its policies will be considered, but firms ultimately want “trusted advisors” like their accountants to keep them informed.
“It’s always important to say to your accountant: ‘What are the policies I’m able to access?’”
Accountants SmartCompany have spoken to have also called for better communication of the scheme and how it works, saying business owners who just speak to their accountant at tax time might be missing out.
“It’s the terminology people aren’t aware off, they think it’s something on top of the assets they’re already buying,” Healthy Business Finance owner Stacey Price told SmartCompany last week.
The current instant asset write-off scheme allows businesses with less than $10 million in turnover to write-off a purchased asset worth less than $20,000 in their tax return for that year.
The scheme was introduced in the 2015 federal budget and extended earlier this year to include the 2018 and 2019 financial years.
Consideration is also still being given to whether to expand the program to increase the turnover threshold or claimable amount.
Industry bodies like the Council of Small Businesses of Australia (COSBOA) are lobbying for the write-off to be made permanent, but Cash says that could dull its effect.
“The reason you have the instant asset write-off is to stimulate investment, if you make something permanent it doesn’t necessarily have that stimulatory effect,” she says.
Access to finance and tax dispute reforms under consideration
Cash says businesses will have to wait until MYEFO in the lead up to Christmas to find out about reforms that could make it easier for firms to access finance.
There have been long-standing concerns it’s too difficult for SMEs to secure affordable capital, which has only intensified in the wake of the banking royal commission.
Cash says she’s discussing the problem with Prime Minister Scott Morrison and Treasurer Josh Frydenberg but would not elaborate on any specific measures.
“We’re looking at a number of policy options,” she says.
Carnell has been pushing for the creation of a commercial growth fund to support high-potential businesses that need capital to scale, but the government has yet to officially lend support to any such program.
Discussions are also taking place relating to simplifying the dispute resolution process between business and the ATO.
Assistant Treasurer Stuart Robert confirmed late last month reforms to make the process easier were being considered in the lead up to MYEFO, following a Four Corners investigation revealing allegations of “bullying” by the ATO earlier this year.
Cash says small businesses want an independent dispute resolution process that sits outside the ATO and is easy to access.
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