Budget 2017: Cutting red tape on the small business wishlist

Zaaki Espresso cafe owners Penny Saris and Anas Ezmigna Source: SBS

Small businesses were among the biggest winners from last year's federal budget following the reduction in the company tax rate - but for many it wasn't enough, and there's now a focus on Tuesday's budget to deliver greater incentives.

Small business owners are hoping the government doesn't tinker with the superannuation system and will reduce red tape in Tuesday's budget.

For many small business owners, such as Anas Ezmigna and Penny Saris, red tape is their number-one concern, at any level of government and can often be a barrier to entry.

"I remember the first visit to the council, I was going to change my mind because I came back with that many applications ( to fill out) and 'you need to do this, this and this'- I didn't know which one (came) first," Mr Ezmigna said.

They got through the process and eventually built their middle-east inspired cafe Zaaki Espresso in Newcastle, NSW.

Mr Ezmigna also mentors migrants starting their own ventures.

"The finance for the new arrivals, they come here, and it would be nice if there was a different system of finance for them to start their small businesses,: he said.

"Some of them are looking for really small numbers to start, probably in a market, and put a table there and sell something, sometimes it is a lack of finance that puts them down."

Last year's budget centrepiece was a reduction in the company tax rate from 30 per cent,  to 27.5 per cent for small businesses with a turnover less than $10 million. It only passed the senate last month.

That rate will fall modestly in coming years, with larger medium sized businesses to benefit as part of the government's 10-year company tax plan.

KPMG Enterprise Tax Partner, Brett Mitchell says more than 60 per cent of its clients said that reduction won't make a material difference, or hasn't gone far enough.

"It may be they haven't seen the benefit as yet of those tax cuts coming through dropping from 30 per cent to 27.5 per cent," he said.

"They're looking at the world stage and seeing Singapore at 17 per cent, UK at 19 per cent and Trump talking about the US going to 15 per cent."

Tinkering with the superannuation system is also an issue, with many small business owners already grappling with changes like the recent reduction in 'before and after' tax contributions.

The super for home loans debate

Martin Fahy, CEO of the Association of Superannutation Funds of Australia, remains opposed to accessing super for a deposit for home loans but would like to see some minor adjustments.

"We're looking for some slight changes, primarily around the superannuation guarantee compliance, we'd like to see the ATO given additional capability to help with lost super," he said.

"We'd also like to see additional funding for enforcement and compliance around non-payment of SG, in particular we'd like to see superannuation contributions included in employment benefits for the purposes of insolvencies situations, at the moment if an employer doesn't pay your SG, and they go into insolvency then you rank quite far down in terms of the creditors we'd like to see it set alongside wages."

It's not just what's in the budget that is concerning small business owners, some want it communicated to them better.

Mr Ezmigna and Ms Saris were able to update their equipment thanks to an increase in the instant asset write-off threshold.

"For instance, when we heard that, I think as a small business you should get a letter explaining, I mean I didn't understand at first what they meant," Mr Ezmigna said.

"It took us a while to understand what it is to be actually benefit from it, and we did, but after we understood what it is."

Meaning the likes of the government, financial advisers, accountants and the media have a role to play, in addressing financial literacy.

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