IT IS TIME to up the ante on the turnover threshold associated with the small business entity definition, according to the Institute of Public Accountants (IPA).

“The $2 million dollar turnover threshold for small business that came into play in July 2007 has not been indexed since its introduction,” said IPA chief executive officer, Andrew Conway.

“The Board of Taxation’s 2014 Review of the Tax Impediments Facing Small Business recommended an increase to the threshold, noting that it would reduce the number of businesses who are at or near the current threshold and so face uncertainty as to their tax treatment.

“Increasing the threshold would also assist businesses with a higher aggregated turnover with low margins to access the concessions. 

“It is estimated that increasing the threshold to $10 million would allow an additional 90,000 to 100,000 businesses access to the full suite of small business tax concessions, decreasing their compliance costs and increasing cash flow.

“This would enhance the capacity to reinvest in small businesses, providing the opportunity for these businesses to grow with increased employment and wages.  It would also incentivise small businesses at or near the $2 million threshold to grow, as currently they would lose these concessions once they pass the threshold.

“According to ABS data, around 61 per cent of actively trading small businesses are non-employing. However, increasing the turnover to include small businesses in the growth phase is likely to contribute to employment growth as these businesses are already employing and in a position to increase their productive capacity. 

“The revenue foregone is likely to be substantially covered by the economic benefits from increased employment, higher wages and lower compliance costs.

“Increasing the threshold would allow more entities access to simpler depreciation rules, lower corporate tax rate and the newly enacted small business rollover restructure relief.

“The IPA recommends that small businesses with aggregated turnover of less than $10 million be given access to the small business tax concessions,” said Mr Conway.

 publicaccountants.org.au

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BUSINESSES are being encouraged to provide feedback on how to make Government ICT contracts more accessible to small innovators.     

Assistant Minister for Digital Transformation Angus Taylor has called on technology companies, start-ups and digital providers to have their say.

“We’ve got to let the outside in; government needs to be porous. We need to open up our ICT contracts to smaller players to solve Government problems,” Assistant Minister Taylor said.

“How we work, how we buy goods and services, how we communicate, is being transformed by digital technology. Government is committed to improving the lives of all Australians through more effective digital services – the opportunity is too great to ignore.

“To capitalise on digital solutions in the private sector, we need to remove barriers for start-ups and SMEs who want to pitch their ideas and win Government ICT work.

“Procurement is the main gateway for the digital technology sector to provide solutions to government.

This gateway needs to be open and streamlined so that new technologies can be deployed quickly to improve public services.”

Speaking at an Open Opportunity forum in Canberra, Assistant Minister Taylor said a future procurement platform should be able ‘to ingest and provide technology’.

“In this framework you would be able to build on Government platforms to provide services and solutions. These solutions may be based entirely or partially on high quality Government data.”

Technology businesses are being encouraged to make a submission to the Commonwealth’s ICT Procurement Taskforce via a consultation paper, a website and upcoming roundtables.

The Taskforce is expected to report back to Government in early 2017.

To make a submission please visit the Department of Prime Minister and Cabinet website: http://www.dpmc.gov.au/ictprocurementtaskforce.

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AN EXPERT in life cycle finance says changes to the Age Pension may lead some pensioners towards risky investments.

Professor Susan Thorp from the University of Sydney Business School has extensively assessed the changes to the Age Pension proposed in the 2015-16 Federal Budget that come into effect this year.

“Changes to the Age Pension Means Tests are likely to encourage wealthier pensioners to spend their savings more quickly than they otherwise would have and take on more financial risk,” Prof. Thorp said.

“Many pensioners, especially the less wealthy and more elderly, hold onto their financial assets into old age.

“However, historically, wealthier pensioners affected by the assets test spend their savings at significantly faster rates than full pensioners,” she said.

“This is partly because less wealth means a higher pension for this group. Recent changes encourage better-off retirees to use up their nest eggs faster, rather than preserve and pass their wealth on.

“Risky investments will also look a little more attractive to some pensioners. The new asset test means that the pension compensates for financial losses at a higher rate than previously.

“If assets fall by $1,000, the pension rises by $78 compared to $39 previously.”

www.sydney.edu.au

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NATIONAL airspace protection is the focus of a new consultation paper, with stakeholder feedback being sought on a range of proposals to modernise airspace regulatory arrangements.

Minister for Infrastructure and Transport Darren Chester said the paper aims to generate engagement with government, industry and community stakeholders on better approaches to this complex issue.

“The paper proposes a modern, consultative and risk-based approach to airspace protection around airports and critical aviation communications, navigation and surveillance facilities,” Mr Chester said.

“It also considers options to better protect low-flying aircraft from hazards operating away from airports.

“I am looking forward to feedback from interested parties as we work toward modernising airspace protection in Australia,” Mr Chester said.

Submissions on the paper will be accepted until 28 February 2017.

To view the Paper and for details on how to make a submission, visit: https://infrastructure.gov.au/aviation/airspace_protection/index.aspx 

• Public Consultation Paper released outlining plans to modernise airspace protection
• Paper covers a range of proposals to protect critical aviation infrastructure while enabling better airport and off-airport planning
• Submissions open until 28 February 2017

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