Treasurer Wayne Swan called his 2011 Budget tough and jobs-focused, but small business recorded no major wins.
Treasurer Wayne Swan called his 2011 Budget tough and jobs-focused, but small business recorded no major wins. ANDREW TAYLOR

Swan budget on target says Blumel

JOBS, mental health, long-term unemployed, vocational education and training, teachers and regional infrastructure.

These were the key ingredients topping Wayne Swan’s federal budget pizza – but the dough underpinning them all had a decidedly “commodities boom” flavour.

And despite Mr Swan acknowledging in the days leading up to budget night last Tuesday that spreading opportunity in the current patchwork economy was one of the biggest challenges facing the government in the years ahead, Accounting North director Matt Richards believes the Treasurer missed a golden opportunity to take that challenge by the throat.

“The budget was pretty uneventful for small business,” he said.

“But that is a good thing, because it means people can get on with what they are doing and not worry about any administrative changes.

“But I do not believe it addressed the hurt that a lot of larger sectors of the economy are feeling. It seemed to be very focused on the mining industry and neglected the fact other sectors are doing it tough.

“Forecasts are that there will be a few more interest rate rises by the end of the year, that’s not going to encourage the building industry, and a stronger dollar will impact on education and tourism.

“I was looking for things to kickstart the rest of the economy, but I don’t think they’ve done that.”

What’s in it for business?

$5000 write-off on new cars (and remaining cost depreciated) bought in 2012-13 financial year, but not claimable until then.

Fringe Benefits Tax calculations on company cars changed to flat rate of 20% instead of kilometres travelled, although a log book still advised to note non-business use.

PAYG payment changes, GDP figure set at 4% not 8% – but no real monetary gain.

$7.1 million for small business support line.

Excess contributions to super relaxed. Currently limits are $25,000 if you are under 50 and $50,000 if over 50 with a 93% total tax on excess contributions. Now, any excess amounts up to $10,000 can be withdrawn from the fund

and taxed at the marginal rate. But it is only available once.

Corporate tax rate reduced to 29% from 2012-13.

Entrepreneurs’ Tax Offset scrapped, which means SMEs and start-ups with income less than $50,000 will now be charged at the normal tax rate, not at the previous concessionary rate.

The argument was the ETO discouraged businesses from growing above that income threshold, Mr Richards said he would have preferred access remain for a business’ first year of operation.

Family Trusts will no longer be able to distribute income tax-free (currently $3,000 per child) to minors. To take effect: July 1, 2011.

“So take advantage of it this year,” Mr Richards said.

And while Mr Richards said he’d be “pretty surprised” if Mr Swan managed to turn a $22 billion deficit around to a $3.5 billion surplus by 2012-13, Regional Development Australia Sunshine Coast chair Debbie Blumel was more confident.

“This is a budget that is designed for the times we live in, it constrains inflationary pressure and was never going to be a major reforming budget.

“I believe Mr Swan is on target to bring it back to surplus – and that is an economic and political imperative.”

The RDA network of 55 committees across Australia is capitalising on the rise of the regions, particularly since the minority-led government took over, performing as Canberra’s ears and eyes in the non-metropolitan areas.

“There is an extra $20.3m over four years to the RDA network which ensures we have resources to deliver for our communities and undertake additional projects through community engagement, particularly around some of the new funding opportunities that are coming up,” Ms Blumel said.

“The other one is $4m for the My Region website.

That will be a valuable tool where you can click on the Sunshine Coast and see a breakdown of major government spending and investment in our region. It will improve transparency and accountability of government expenditure.”

Ms Blumel also welcomed $8 billion for health and hospitals, $916 million for regional infrastructure, $110 million for regional universities and $500 million over five years for VET.

And she said there would be real opportunities for education and training to boost the region’s productivity as well as in affordable housing, retail services and health to accommodate the families of workers we may be losing to the mining boom.

“By embedding regionalism into the way they are presenting their budget to the Australian nation they have really progressed this narrative significantly.”

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