Good news for starters

The Federal Budget released last week included immediate tax deductions for any individual asset up to $20,000 for small businesses that have a turnover of less than $2 million.

The threshold was previously $1000.

Also, the company tax rate for those businesses will be reduced by 1.5 percentage points to 28.5 per cent.

Mr Barry said the write-offs would not necessarily lead to more businesses popping up in the area.

�It is a tax write-off not a grant, it is not putting that much money back in pockets,� he said.

�If you purchase something for $20,000, about $5000 to $6000 will be returned when claimed, but it will still cost the business $14,000.�

He said in his professional opinion, anyone wanting to start a new business based on the tax write-off incentives should �wait and see� first.

Mr Barry said he saw the incentives as the Federal Government�s �flippant answer� to trying to raise employment after the resource boom had passed.

He said he would still encourage businesses to be optimistic about the future.

Federal Small Business Minister Bruce Billson told ABC Radio on May 13 that the government was prepared for an influx of people trying to get an Australian Business Number (ABN).

�One of the less reported measures in the Budget package was around streamlining that process, making sure that whole business registration and formation process is made easier,� he said.

Small business owner Belinda Dawes, based in Bayswater, welcomed the incentives. �I think there are some big pluses for small businesses (in the Budget),� she said.

�Speaking from experience, when I set up (my business), there were big costs; the write- offs would make a big difference for people just starting out. The 1.5 per cent tax rate cut is better than nothing, but I don�t think I will notice much change.�