More help needed for the self employed

Written by: Adam Micmacher

While the stimulus announcements from both the Federal and various State Governments have been very welcome, there has been very little in the announced packages to support self employed small businesses.

The additional payments to be made via Centrelink in the form of the Coronavirus supplement and economic support payments are more targeted at three main groups.

The first are existing Centrelink registrants who will receive the money automatically, the second are existing registrants in receipt of a Government pension and the third, new registrants who have recently become unemployed or redundant

The other parts of the stimulus package are targeted at small business via “boosting cash flow for employers” and increasing the instant write-off threshold for business assets

Boosting cash flow for employers is targeted at businesses that have employees. In summary, businesses with employees that report payment of wages to employees in the March and June quarters are most likely to receive a minimum of $10,000 and potentially up to $20,000 as a cash payment on their tax account with the ATO. The reality is that the majority of self employed businesses do not have employees and struggle to earn a sufficient amount to support themselves.

The instant asset write-off threshold was increased from $30,000 to $150,000. While this is great if you’re in the market for high priced equipment or fittings, again, this is not the sort of support that’s going to assist the majority of self employed businesses

More needs to be done!

For example, the UK is looking at providing support to the self employed through the payment of a subsidy that is equal to 80% of the profit earned in the previous year. While this is not a perfect scenario at least time and thought have gone into an important part of their economy that has been predominantly overlooked at this point in this Country.

We need Governments at both Federal and State level to do more to assist the self employed by introducing innovative programs and delivering money in support of these programs directly to the self employed.

I hope that all of you are keeping safe and well at this challenging time.