May 2010

2010 BUDGET IMPACT SUMMARY FOR BAKERY OPERATORS

As expected, Wayne Swan's third budget is a conservative and cautious affair, designed to bring Australia back towards a budget surplus. Here is a summary of how it may affect your business.

NBIA is disappointed with the Budget, as there was no immediate help for small businesses who find themselves operating in some of the worst trading conditions in years. While the cuts to the corporate tax rate and the immediate asset write-off is good, smaller businesses won't see the benefits of these for more than two years.

NBIA supports these reductions in company tax, which will be of value to about 720,000 small businesses. However, two-thirds of small bakeries are unincorporated and do not receive a benefit from reductions in company tax. Those two thirds pay tax at marginal personal rates, which were not reduced in the Government Response to the Henry Review. Similarly, business owners who take profits out of a company will receive limited benefit in terms of the income tax they pay.

The Henry Tax Review recommended reducing the company tax rate to 25 per cent in the “short to medium-term with the timing subject to economic and fiscal circumstances”.

Those two-thirds of unincorporated small businesses do however secure benefits in the Government Response in other tax areas. The Government has announced that small
business will be permitted to immediately write-off assets valued at under $5,000 and will also have access to simplified depreciation of all other assets, excluding buildings, in a single pool at a 30 per cent rate. These measures will be introduced on 1 July 2012 and cost $1.03bn in 2013-14.

Set against these tax concessions for small business is, however, the fact that all small business employers – incorporated or unincorporated – will be required to pay the higher superannuation guarantee levy over the course of the next decade.

The funding base for the proposed reductions in company tax and the depreciation and asset write off tax changes is the proposed Resource Super Profits Tax. NBIA believes that these tax concessions for small business, particularly the asset write off changes and the depreciation changes, are merited in their own right – and indeed overdue. They should not be dependent on a new tax being imposed in order to be given budget priority.

Tax cuts from 1 July 2010:

• Increase to Low Income Offset, effectively raising the tax free threshold from $14000 to $16000 for salaries up to $30,000

• Increase the 30% tax threshold from $35,001 to $37,001

• 38% tax rate will be reduced to 37%

The Government will introduce a standard deduction clause for taxpayers that will allow taxpayers to deduct $500 of work-related and tax agent expenses from 2012-13, with the allowance rising to $1,000 from 2013-14.

Tick and flick tax returns for 2012 onwards:

• System will work on an opt in basis – i.e. so workers can still claim expenses above the standard deduction.

• For y/e 30 June 2013 taxpayers will have the option of a $500 standard deduction for work related expenses and the cost of managing tax affairs to simplify their tax returns. $500 in deductions

• For y/e 30 June 2014 this will increase to $1000 deductions

The Government predicts 6.4 million people could use this option.

IN SHORT

• The main initiatives for small business were previously released as part of the Government's response to the Henry Tax Review. These include a reduction of the corporate tax rate from 30% to 28% and the immediate write-off for assets costing less than $5,000. Both will come into effect from July 1, 2012.
  

• Treasury says unemployment peaked at 5.8% last year and will now fall to 4.75% over the next four years, indicating the Australian economy is close to full employment.
  · The Government has delivered the third tranche of tax cuts promised in the 2007 election campaign. The 30% tax rate has been raised for all taxpayers from $35,000 to $37,000, saving the average taxpayer $200 a year.
  

• The Government will spend more than $660 million in training, apprenticeships and adult literacy and numeracy programs over the next four years. Initiatives included 39,000 additional training places in high-demand sectors, plus support for 22,500 apprentices.
  

• The Government will encourage savings by providing a 50% tax discount on the first $1,000 of interest earned on deposits, bonds, debentures and annuity products.
  

• The Government will spend $125.2 million over the next eight years to create a single national online registration system for business names and Australian Business Numbers, meaning businesses will no longer need to be registered in each State and Territory. .
  

• Small businesses that account for GST on a cash basis will be allowed to claim input tax credit upfront in relation to hire purchase agreements.
  

• The Government will spend $2.7 million to improve access to mediation for those operating under the Franchising Code of Conduct, the Horticulture Code and the Produce and Grocery Industry Code.
  

May 2010

PURCHASE ENTERTAINMENT BOOKS FOR
PINK RIBBON FUNDRAISER

Selling for only $65, each Book includes an Entertainment™ Gold Card, which is valid for incredible offers from fine restaurants and hotels in your area.

For more information please visit www.entertainmentbook.com.au/

May 2010

AUSTRALASIAN BAKER MAGAZINE - THE FACTS

Published by the National Baking Industry Association (NBIA), the Australasian Baker is printed only to benefit bakers and be of value to the industry as a whole – not used as a profit-making tool by independent companies.

With the simple goal of being educational, informative and inspiring, the magazine maintains a good balance between articles and advertising and strives to be the first in showcasing the latest in trends, products and practices from around Australia and the world.

Each edition of Australasian Baker includes Industrial Relations news, recipes, book reviews, articles on baking throughout the rest of the world, features on topics such as gluten free baking and organic production, reviews of other Australian bakeries and guides on better marketing, branding and business in general.

This is the magazine that helps the bakers to develop their businesses – whether that be through coverage of innovative organisations, information on new baking products, profiles on those who influence the industry most or practical business information in areas of marketing, systems, manufacturing and management.

If you need to reach the baking industry and communicate in an efficient way, Australasian Baker is by far your best resource. First established in 1897, it has enjoyed a long history as the industry’s preeminent magazine and a number one resource for all things baking.

ACCI ACHIEVEMENTS

As your national body we represent you by being a member of the Australian Chamber of Commerce and Industry (ACCI) which speaks for over 4 million employees at the federal level; working for the benefit of your business. Below is a small snapshot of the work ACCI has done in the last six months on your behalf.

Influencing Award Modernisation

• ACCI continued to fight against increases to labour costs under the new national industrial relations awards. We persuaded a Full Bench of the Australian Industrial Relations Commission to phase in cost increases over a five year period. As a result, employers will save around $882 million each year, or $4.4 billion over five years.

Unfair Contract Terms

• ACCI successfully lobbied the Australian Government to stop laws that would have allowed employees to challenge the fairness of their employment contracts under “consumer law” legislation.

Boosting Workplace Skills

• ACCI was instrumental in developing a Workplace Mentoring Skills Set, in the new Training and Assessment Training Package currently under development by Innovation and Business Skills Australia. Our aim is to create a mentoring skills set to keep apprentices engaged for the duration of their tenure and ensure an effective transfer of skills from employer to apprentice..

Research Study

• ACCI and the Federal Minister for Employment Participation Senator Mark Arbib launched an ACCI research study Worth Their Weight in Gold. The study examines re-engagement, support, suitability, retention and management strategies for disengaged apprentices and ways to actively encourage them to return to their trade, boosting workforce skills.

NBIA will continue to support ACCI as it works to support you, please contact Zoe if you have any questions about your membership or would like to join NBIA by phoning 07 3831 5961 or email her here.