Federal budget 2016: Lower business tax rate to be invested in technology

Futurespace CEO Angela Ferguson says businesses like hers will now enjoy the lowest company tax rate of 27.5 per cent. Photo: Jessica Hromas

• How to claim new tax benefits

When you give individuals tax breaks they splash out on little luxuries. Turns out, businesses aren't too different.

This is the second budget in a row that focuses on the small to medium sector 

New technology, a junior staff member and a veggie patch will be the flow-on benefits of this year's "jobs and growth" budget for one medium business.

Small Business and Family Enterprise Ombudsman Kate Carnell says the government is getting behind small to medium businesses. Photo: Jeffrey Chan

Angela Ferguson, chief executive of Sydney interior design and architecture firm Futurespace, is delighted firms like hers who have a turnover of less than $10 million will now enjoy the lowest company tax rate of 27.5 per cent.

"The difference this makes to us is about $40,000. We've been in a position for about 12 months where we've wanted to grow the business but we haven't been able to, so this is very exciting," she said.

"Now we can hire another junior staff member to free up more senior people to grow and future-proof the business."

Ferguson's company designs interiors for workplaces. Photo: Jessica Hromas

Ferguson, says her 20-strong staff expect the newest technology so they can advise the likes of PwC and the Reserve Bank of Australia.

With the extension of the $20,000 instant tax write-off from the 2015 budget Ferguson plans to get a new server so her staff can work anywhere anytime.

"We'd be giving people more flexibility around where they work so they can be engaged and more productive." 

"We also want to keep providing a healthy workplace so we want to have a vegetable garden and a much better kitchen for people to make lunch in," she told Fairfax Media.

Equally thrilled is Small Business and Family Enterprise Ombudsman Kate Carnell.

"This is the second budget in a row that focuses on the small to medium sector and says that government is behind them. And as we know, confidence is the most important commodity in that sector " she said.

"We also really love the changes to BAS statements. It is something we've been rallying government to do for a long time, and it will reduce paperwork.

Carnell emphasised that as the mining boom ends and as big businesses increasingly downsize, the importance of the small business sector is growing.

Her views match those of Jon Carcich​, director of taxation and services at Bentleys accounting firm in Perth.

"In the WA economy, it is very tough right now. It's not so bad in Victoria and NSW. The tax cut should allow money flow around our economy: to create more jobs, more income for businesses. Hiring more people is more taxes as well," he said.

"Have they done enough to encourage businesses to spend more money? Time will tell." 

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