Australia’s 2015 federal budget is big news for small businesses and startups with e-commerce in mind
June 2, 2015
When we think of startups, brimming with potential and ample funding, the Silicon Valley, Seattle, and New York City come to mind. However, you may be surprised to learn that Australia has a larger proportion of the population starting a small business than almost any other developed country in the world. Capitalizing on this success, Australia’s 2015 federal budget is targeting small business owners and offering them support.
High growth startups have the potential to contribute 4 percent of Australia’s GDP and could add over half a million jobs to the Australian economy. Couple this with the fact that Australia’s e-commerce sector outperforms traditional retailers (between January and March 2015 alone, Australians spent $4.37 billion online), and it’s easy to see why this year’s budget is big news for e-commerce and online order fulfillment.
In summary, Australia’s 2015 federal budget decisions award small businesses with $5.5 billion to encourage their growth. The breakdown:
- Tax cuts totalling $3.3 billion
- Accelerated depreciation of $1.8 billion
- $70 million in support for startups
Tax cuts and accelerated depreciation
Aussies with small businesses will be pleased to know that the business tax rate was cut from 30 to 28.5 percent, and employees who own equity no longer have to pay tax when their shares are issued. Instead, taxes are due only when their shares see financial gain. Another substantial tax measure stimulates the adoption of new technologies, particularly mobile. By abolishing the fringe benefits tax on portable electronics, the Australian government is effectively giving small business owners peace of mind in providing employees with devices necessary to conduct their work.
Until mid-2017 small businesses can deduct up to $20,000 (previously only $1,000) in professional costs associated with creating a business, directly incentivizing entrepreneurial efforts. Treasurer of Australia Joe Hockey explains, “If you run a café, it might be new kitchen equipment, or new tables and chairs. If you’re a tradie, it might be new tools or a computer for the home office.” For startups, especially those in tech, this could be game-changing, as indispensable item purchases that were once prohibitively expensive are now on the table.
So contends its government’s website, “Australia is a nation of entrepreneurs.” And for the nation’s innovators, 2015’s federal budget also promises to (1) remove obstacles to crowd-sourced equity funding and (2) streamline the business registration process.
In order to raise money from small investors, transitioning to a public company will become less expensive. Prior to this new law, proprietary company restrictions would have obstructed support from investors early on. For new companies looking for funding outside of securing a bank loan or utilizing personal resources, however, this new regulatory framework means accessible crowd-sourced funding and less red tape.
Australian entrepreneurs should head over to business.gov.au for a streamlined approach to structuring their startups. With efficiency in mind, this online resource will do well to support new business owners: Rather than independently gather and decipher the appropriate paperwork associated with establishing a business, this website acts as a one-stop-shop for those new to owning enterprise assets, providing filing resources up front such as company, business name, and fringe benefits tax registration.
Online order fulfillment
About 96 percent of Australia’s businesses are considered small businesses, employing 4.5 million people and producing more than $330 billion of economic output. Added budget for these businesses will translate to accelerated growth, and new businesses selling physical products (especially companies rooted online) will require a reliable order fulfillment solution to move inventory to clients domestically and internationally. The upward trend of Australia’s e-commerce spending economy points to Australia’s position as a strong market for both outgoing and incoming product.
Shipwire’s international network of fulfillment centers includes a state-of-the-art facility outside of Sydney, Australia. All Shipwire fulfillment centers are supported by a powerful technology platform that enables merchants to manage inventory in any location, from any location. For more information about Shipwire’s order fulfillment opportunities in Australia, click here.