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Why now is the time for SMEs to shine

By Greg Bell

Economic and financial conditions are apparently working in the favour of small and medium-sized enterprises (SMEs) at the moment, giving every reason for them to consider office leasing on the Gold Coast.

Following the details of the federal government's 2016-17 budget, there are high hopes that the business landscape will now be skewed in the favour of smaller companies. Meanwhile on a state level, policies and procedures are being put in place across Queensland to make sure these organisations have what they need to be able to thrive.

Jobs and growth move up list of priorities

The future strength of the economy understandably played an important role in this latest budget, with the government laying out its plans for how more jobs and growth would be delivered. One of the main challenges is making sure the economy is no longer so reliant on the success of the resources sector, as has been the case over recent years.

Increasing the number of available jobs is essential, which means giving companies the tools they need to expand their operations. Although SMEs might not have the recruitment power of global firms, they nevertheless have an important part to play in keeping the economy alive.

Among the measures outlined in the budget is the introduction of a Youth Employment Package. This is designed to encourage 120,000 young people across the country to find jobs – a measure that will cost the government $840million over the next four years.

Measures that will benefit SMEs

Deloitte analysed the finer details of the budget, explaining that measures to protect SMEs are undoubtedly welcome, not only by the businesses themselves, but the wider economy.

One of the key policies the government introduced was lowering the company tax rate by one per cent. The small business entity threshold has also been increased from $2million to $10million. This could make all the difference to small businesses, who may find themselves in a better financial position to buy commercial property in Surfers Paradise.

Policies designed to get businesses to spend more were also embraced by Deloitte, especially due to the long-term benefits they could bring to the Australian economy as a whole.

Missing a taxation trick?

Deloitte believes there are other areas that could have been addressed. For example, the government could have gone one step further by making Capital Gains Tax concessions available to a much wider pool of firms.

"Disappointingly, this concession remains available only to businesses with an annual turnover of less than $2million or to taxpayers that satisfy the $6million maximum net asset value test," said Deloitte Tax Partner, Spyros Kotsopoulos.

"Given the $6million net asset value test was introduced in 1999, it is probably appropriate that this threshold be revisited."

Another sticking point is that many SMEs won't be able to make the most of these latest changes until they've lodged their tax return. As a result, their cash flow is unlikely to see any immediate benefits until the end of 2017 at the earliest, if not a little later.

Even in light of some of these criticisms, now still remains a good time for businesses to review their operations. For small companies, this might involve investing in new staff or equipment, or moving into commercial property on the Gold Coast.

While we might not be recruitment experts, we do know a thing or two about commercial real estate in this part of Queensland. Make sure you give our team a call to discuss your requirements and how to make the move to the Gold Coast.

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