Businesses welcome relief

A $5.5 billion dollar investment in small business, which includes lowering the company tax rate and reducing red tape, has been described as a welcome relief for struggling small businesses in the Goldfields-Esperance region.

Treasurer Joe Hockey last night confirmed small businesses with an annual turnover of less than $2 million would see a 1.5 per cent cut, effective July 1, reducing their tax rate to 28.5 cents in the dollar.

The move, which will bring about the lowest small business company tax rate in 50 years, has effectively created a two-tiered tax system where larger companies are still subject to a company tax rate of 30 per cent.

Small business can also now claim a tax deduction for every item they purchase up to $20,000, effective immediately.

The Government will also allow owners to immediately deduct the costs incurred when starting up a new business or receive tax relief when restructuring an existing business.

Mr Hockey said the changes were designed to help small businesses flourish and create more jobs throughout the nation.

"We also want Australians to start a new business, and we want them to grow," he said.

"Why? Because new businesses create new jobs."

In Esperance, where small businesses comprise close to 98 per cent of all registered businesses in the region, the changes are likely to have a significant impact on the community.

Esperance Chamber of Commerce and Industry corporate manager Tori Castledine said the measures came at a time when the business community desperately needed Government support.

"Hopefully it will go quite far but anything that can help, certainly businesses are screaming out for it at the moment," she said.

"Red tape is certainly an issue for small businesses, there are so many hoops that they have to jump through - anything that works toward cutting through red tape will be a huge benefit."

Kalgoorlie Small Business Centre business adviser Gary Brown also welcomed the changes, saying anything that would stimulate growth in the region was a bonus.

However, he raised concerns about how effective the Government's measures would be and suggested investing in infrastructure would have been more beneficial.

"Depending on the size of the business it won't necessarily make a significant impact but paying less tax is great for any small business," Mr Brown said.

"But what we need to do is see spending on infrastructure to help these small businesses out.

"The more dollars that are being spent in the community, it means there is more money to spend on consumables … and that's what helps the local economy, and that creates more jobs which is what we really want to see."