Little Benefit For Small Business In Federal Budget

SYDNEY – May 12, 2011: Treasurer Wayne Swan delivered a Budget that looks ahead to a return to surplus in two years’ time. This is a positive move by the Gillard Government, as is the intention to lift productivity and remove capacity constraints.

However, VACC, which represents 5,500 small automotive businesses in Victoria and Tasmania, is disappointed the Budget has little in it for small business owners. Overall, there is not much assistance for small businesses and the underlying concern is that despite this Budget, interest rates will increase, therefore, costing business owners more just to open the doors.

“VACC takes issue with the increase of Fringe Benefit Tax (FBT) on vehicles. The Government has, with immediate effect for new contracts, introduced a single rate of 20 per cent FBT on company cars, regardless of the distance they travel. This is too high as it is applied across the board. In our view, a more equitable rate is 15 per cent,” VACC Executive Director, David Purchase, said.

VACC welcomed the Treasurer’s $5,000 instant tax write-off for motor vehicles

Similar to previous stimulus packages, the tax deduction will assist small business owners invest in vehicles, and have a positive effect on new car sales.

“As the largest employer of automotive apprenticeships in Victoria, we commend the Government for investing in training and apprenticeships and for continued support for Industry Training Advisory Bodies, that is to say, Industry Skills Councils. The Apprenticeships Mentoring Package looks good and could prove to be worthwhile if industry is engaged. But we have some concerns regarding the funding for Cert II level apprenticeship and training qualifications only being available for priority groups. We require more detail on this because it could have a negative effect on small business employers starting new apprentices,” Mr Purchase said.