45,000 Trucking Businesses to Benefit from Federal Budget but Industry Bodies Still Have Concerns
The Abbott Government’s second federal budget has offered renewed hope to more than 45,000 trucking businesses with a multi-billion dollar small business boost and new focus on “fairness”. However, some industry bodies have expressed concerns.
The government has pledged $5.5billion to help 2 million small businesses who are now able to deduct any asset costing less than $20,000 – a massive increase from the current $1000 value deduction. This asset write-off for small businesses is effective as of June 30th 2017.
The government has also announced reductions in company tax for small businesses that turnover less than $2 million annually.
Christopher Melham, Chief Executive of the Australian Trucking Association (ATA) welcomed the budget announcement,
“More than 45,000 trucking businesses will benefit from these tax changes announced in today’s Budget,”
“These small businesses operate on tight margins, and the ATA welcomes this reduction in their tax burden.”
NatRoad CEO, Warwick Ragg also welcomed the budget which will undoubtedly go a long way in increasing jobs and benefiting small businesses, many of whom are NatRoad members.
Some of the budget measures that relate to small business road transport operators include:
1. A cut in the corporate tax rate from 30% to 28.5%;
2. Unincorporated small business will benefit from a 5% tax discount, up to $1,000 per year, which roughly equates to that offered to incorporated businesses;
3. An immediate tax deduction for every asset they buy costing less than $20,000. This deduction starts immediately and finishes 30 June 2017. Assets over $20,000 can be pooled and depreciated at the existing rate, that is 15% in the first year and 30% per year after that; and
4. Small-businesses will benefit from Capital Gains Tax rollover relief when changing their legal structure, while keeping the same owners.
The post on BigRigs.com.au highlights that NatRoad is still concerned about the $2million turnover threshold, which they say should be increased to $5million. They say this is more realistic.
NatRoad is also concerned that the Capital Gains Tax reform fails to address tax liability when transferring a family business within the family.
NatRoad welcomed the overhaul of incentives for employers to hire older workers and receive a subsidy of up to $10,000 over 12 months (for workers over 50), because the problem of attracting and retaining experienced drivers and skilled employees was a real concern.
Mr Ragg also called for a further reduction in red-tape and what he describes as “unnecessarily onerous compliance and enforcement requirements” which he says are forcing many people out of the industry.
Another concern expressed by Mr Ragg was the reintroduction of bank deposits tax which he described as “a business disincentive”.
Mr Ragg expressed approval of the government’s $200 million Heavy Vehicle Safety and Productivity Program,
“The Government’s commitment to maintain the Heavy Vehicle Safety and Productivity Program, worth some $200 million, is welcomed. This program aims to enhance the capacity of existing roads, improve connections to freight networks and to fund additional, or to enhance existing, rest stop and decoupling bays.
Read more at: http://www.bigrigs.com.au