Tonight is budget night for the Federal government, which means small business owners should also be in the midst of planning for the new financial year. Despite what tonight’s budget holds for small business (most likely not much) here are four things every small business owner should consider when planning for the year ahead:
1. The company rate promised tax cut:
A cut to the rate of 30% company tax was promised last year without delivery. With the large deficit rumoured to be at around billion, a cut this year is unlikely to be announced.
2. Minimum wage increase:
The national minimum wage increase will be announced next month and will apply from July 1st. Predictions are for an increase of around 2-3% . If you are unsure after the increase as to staff pay rates, we recommend seeking legal advice. This increase, together with the extra 0.25% to be added to superannuation, will be challenging for small business.
3. Transitioning of awards:
The transition to pay arrangements under Modern Awards will continue into its fourth year, come July 1st, meaning another round of transitioned pay rates and penalties. Employers struggling with transitioning of pay rates should seek advice as to rates that apply from 1 July.
4. The Coalition’s IR Policy announcement:
There was hope from small business owners that the Coalition would announce plans to reduce penalty rates from awards – particularly in sectors that operate across seven days, such as retail and hospitality. Tony Abbott has specifically stated at the press conference launching the policy that changes to penalty rates was not part of the Policy.