Helping small business grow

Backbone of the economy

Australia's 2.4 million small businesses are the backbone of our economy. The Government's tax package will give them tax relief and cut red tape, so they can get on with running their businesses.

Early start to company income tax rate cut

The Government will provide a cash flow benefit to many small businesses by introducing an earlier cut to the company income tax rate to 28 per cent for small businesses from the 2012‑13 income year. This change will enable small business companies to reinvest more of their profits back into the

company to expand and grow their businesses.

Instant asset write‑off

The Government will significantly enhance and expand the existing capital allowance (depreciation) concessions available to small businesses from 1 July 2012. These changes will increase cash‑flow, reduce compliance costs and simplify the depreciation calculations for up to 2.4 million small businesses.

From 1 July 2012, the threshold under which depreciable assets of small businesses can be immediately written‑off will be increased from $1,000 to $5,000. This will enable

small businesses to immediately deduct the costs of a significant proportion of their business assets.

Small businesses that elect to pool their assets will also be able to depreciate other assets (apart from buildings) in one pool at a rate of 30 per cent. This single pool will replace the two pools under the existing law.

In addition to increasing the cash flow of small businesses, these changes will also reduce compliance costs by removing the requirement to calculate depreciation allowances and track assets for depreciation purposes.