Scottish Pacific lends support to SMEs
Debtor finance operation Scottish Pacific has said small businesses “deserved” the good news from this week’s budget.
The firm’s head of debtor finance Greg Charlwood backed the measures supporting SMEs, claiming SMEs can and will deliver broader economic growth in Australia.
“We are pleased to see the benefits for companies with a turnover of $2 million being extended to a sensible level of $10 million turnover where we see it will have greater impact in terms of business investment and boosting job growth and employment,” he said.
“We support the reduction in the company tax rate for SMEs [dropping from 28.5 per cent to 27.5 per cent for small incorporated businesses with up to $10 million turnover] as it should energise SMEs, encourage business investment and drive growth and innovation,” added Mr Charlwood.
He also noted the results of Scottish Pacific’s most recent SME Growth Index, which indicated a continuing decreasing trend of SMEs saying they were in positive growth mode (currently 58 per cent), “so the tax rate reduction is a welcome initiative to activate the SME sector, which can drive growth in the economy”.
“The changes tightening contributions to superannuation may encourage SMEs to invest in their business, and potentially in other SME businesses, as their retirement fund – this is a great way to get a business exit-ready.”
He added: “The continuation – and extension – of the $20,000 asset write-off incentive for SMEs, now applicable for those with turnover of up to $10 million, is welcomed; and while it’s not a ‘game changer’ on its own, it further underlines the efforts to create a positive environment in which SMEs can invest and grow.
“SMEs can spend to get depreciation benefits on small capital items, but it’s not a good business strategy to use working capital to buy assets.”
“We welcome the budget’s initiatives to benefit start-ups, including enterprise tax cuts, an expansion to CSIRO’s accelerator program and changes to employee share schemes,” Mr Charlwood said.