Mid-market businesses overlooked in federal budget
The Federal Budget delivered on targeted tax incentives for businesses involved in the green transition but relief for the mid-market was sorely missed.
Mid-market businesses have been given little to celebrate in the 2024-25 Federal Budget just handed down by Treasurer Jim Chalmers.
Small businesses with annual turnovers below $10 million have been given a 12-month extension on the $20,000 instant asset write-off scheme, but the government stopped short of raising its operation to medium-sized businesses.
"I think if you ask most tax advisors, conceptually we think [the instant asset write-off scheme] is a good idea but it needs to be extended to have to medium-sized businesses," said Grant Thornton tax partner, Vince Tropiano.
Businesses central to the green transition were among the clearest winners of the budget, with new tax incentives for hydrogen and critical minerals producers. Support for those outside key, targeted industries were limited.
The Future Made in Australia green technology and manufacturing platform and associated investments designed to increase the country’s global competitiveness will attract $22.7 billion over the next decade.
"I think a lot of [the relief] is targeted to particular industries rather than supporting the economy in general... It's not just individuals struggling to pay the rents, it's businesses struggling to pay their wages and having to increase prices which may impact on sales and all sorts of things. I didn't see a lot of support in that sort of area or encouraging further investment," added Tropiano.
Asked whether the budget achieved the kind of 'substantive' tax relief called for by CA ANZ, Tropiano answered the budget was simply "more of the same."
"Certainly, the biggest bug with our clients and business generally is the lack of appropriate tax reform. Government still relies substantially on personal income tax," he said.
"There's little doubt that even corporate income tax and GST especially is a much more efficient tax, but probably a bit harder to implement, certainly harder to implement any real change in that regard."
"But what our clients would want to see is a more efficient tax, less administration, less red tape. Not sure we saw anything today or tonight that's going to head down that path."
