One of our major recommendations is the development of a state-backed loan guarantee scheme to address the lack of affordable finance for small business, which is impeding growth. In fact, Australia is one of the only countries in the developed world without such a scheme. The intention is to encourage banks and other commercial lenders to increase the supply of loan finance available to small business at affordable rates
and on reasonable terms.
A signature policy of the IPA has been to improve small business productivity by reducing the income tax rate to either zero – when the economic climate allows – or a much-reduced rate. We suggested offsetting the reductions by streamlining small business tax concessions.
It is pleasing to see that both the government and the opposition have adopted the essential concepts behind these policies. In the 2015 Budget, the government announced a reduction of 1.5 per cent in the income tax rate for incorporated small businesses and a 5 per cent discount for unincorporated small businesses. In its Budget reply, the opposition announced a small business loan scheme.
The IPA has welcomed both announcements. We now look forward to being part of the consultation process to ensure the successful implementation of these and other beneficial policies for small business.
