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The Australian budget was handed down last night and it’s received mixed reviews, that’s for sure. But to get his take on it and the reaction from small business right across Australia, let’s bring in Bill Lang from Small Business Australia. Hi, Bill. Thanks always for your time. Now let’s talk about this the budget was handed down. Now there definitely was mixed reviews mixed emotions from all different industries. But what exactly does it mean for business?
Yeah, well, I think Small Business Australia, our review of what’s been announced is we probably give it an A minus, which is a really strong mark, with respect to the impact for business, one of the most important things for business is having customers that are confident and confident spending their money. So the tax cuts for low and middle income earners is more money in their pocket, more money to spend, and most of that money will get spent with small businesses. So we give that an A plus with respect to that.
But another area, which is really important, because there’s still more than four in 10, small businesses do not have their revenue back at the level that it was before COVID happened. So some of them are still looking at making losses. And what the government also announced was that if they were paying tax in the year before COVID came, if they do make losses for the last financial year and this upcoming financial year, they’ll be able to get a refund from the ATO from the Australian Tax Office, get back some of that money they paid a couple of years ago when they were profitable, to help keep their businesses going. So again, that’s a real positive with respect to supporting in that case for in 10 small businesses.
So how does that actually work? How do they go about it? So once they lodge their tax returns, that’s when it all equate to that return? Or how does it all work?
Yeah. So typically, when a company or a business makes a loss, they have to carry it forward, and they can offset it against a future profit. So in this case, it will look at you know, what was the taxable profit in the year 2018-2019. The fact that it’s made a loss Now, what’s the value of that loss? How much tax therefore, could they get back based on what they’ve paid? So the computers work it all out, and it’s always important for all business people to, you know, confirm with their tax advisor, that they’re getting it right but you know, the accountants and tax advisers on top of it