Hahaha.
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Thatâs because a business owner has to bear significantly more risk than a salaried employee. I think medium to large corporations get away with murder in terms of tax treatment but SMEs need all the help they can get IMO.
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With risk comes the great rewards
You know 60% + of SMEs fall over within the first two years.
Yep.
Our business has been going for about 25 years and we still have our struggles. Most small business only needs one poor year to stuff it completely, and are usually started totally undercapitalised and without a viable business plan.
We have been lucky, have a really good Accountant and Mrs Fox has been present to keep my feet on the ground and nose on the wheel.
But as the original discussion went, SME owners can legally structure their income to minimise tax in ways that PAYG workers cannot.
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As I said before itâs their ârewardâ for bearing that risk. You somehow need to incentivise and stimulate SME growth otherwise everyone would just be a salaried employee and not bother.
Which means no innovation, minimal job creation, â â â â salariesâŚI guess thatâs a somewhat apt descriptor of current AustraliaâŚ
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So many small businesses are started/bought by people who inherit or get redundancy and I found they were much more likely to be the ones that fell over.
I want to be my own boss and do something easier⌠like open a cafe
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We have had some really very nice people start Cafes and Restaurants in our Town. Mostly locals who liked to cook and thought that running a Food Business was all about food.
Sadly most have gone broke, some in massive ways after investing their homes and about everything they own. Even those who made really good food found it very tough and went broke, because they just could not make enough profit to stay afloat.
Lol, our business is innovative, we created jobs (with the potential for 40 more) and we pay well over the odds to get the best people.
We got about $600,000 from the Aust Gov to commercialise technology we licensed from CSIRO; we invested about $1,000,000 of our own and developed a great product with no competitor that should be installed in just about every process line in industry across the world. But we have struggled to gain traction and not having the funds to setup offices in Europe and USA.
The AusIndustry Staff (who gave us the $600K grant) suggested we get the products made in China. I rejected this and we have plugged on. Five years on and we have sold a few units each year, but very little return to our or the Govn investment.
Just signed a deal with a large US Company for them to distribute Worldwide, and while that will make us more money, it will probably lead to the units being made in the USA eventually.
My point is that, while it is great to get Government Support to commercialise technology; it means zip if you cannot get the product to the market. AusTrade is as useful as bulls breasts, and there are very few options for SMEâs unless you sell out to Venture Capitalists. If we had moved to the USA and did our product development there, we would have been much better off.
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theage.com.au
We have a bad case of misdirected compassion
Ross Gittins
5-7 minutes
By ROSS GITTINS
25 March 2018 â 10:09pm
Why do so many of us â and the media, which so often merely reflect back the opinions of their audience â feel sorrier for those who profess to be poor than for those who really are?
Last week, on the day after the single dole was increased by 50¢ to a luxurious $273 a week ($14,190 a year), Malcolm Turnbullâs henchmen succeeded in persuading Pauline Hansonâs One Nation to let him give the down-and-out part of our one nation another kicking. (Sorry, my Salvo upbringing is showing again.)
Youâve heard the news that homelessness is much more prevalent than we thought. According to the Australian Council of Social Service, the Senateâs passing of the Orwellian Welfare âReformâ Bill will, in its first year, add to homelessness by cutting off payments to more than 80,000 people.
The bill contains 17 measures that will adversely affect the lives of thousands of the unemployed, single parents and women and children escaping violence.
Youâve never seen such a list of pettifogging nastiness, yielding tiny savings to the budget.
The unemployed will no longer be back-paid to the day they lodged their claim, meaning the longer Centrelink takes to process that claim, the longer the jobless go without (or have to go cap-in-hand to outfits like the Salvos) and the more pennies the government saves.
Letâs hope it doesnât make lengthening processing times a KPI.
Until now, the legislation has protected people who canât complete and lodge their claim because theyâre in hospital, are homeless, are escaping domestic violence, or are victims of natural disaster or fire. Sorry, such pathetic excuses will no longer be accepted.
Fortunately, Hanson was shamed into reneging on a commitment to remove a small, one-off âbereavement allowanceâ.
So, were the media up in arms over this gratuitous attack on people who are already below the poverty line â this âcash grabâ?
No, they hardly seemed to notice. Perhaps they were distracted by the bitter tears they were shedding over the plight of all those poor self-funded retirees whose unused dividend imputation refunds the evil Labor Party is threatening to steal.
Iâm sure there must be a few retireds with genuine cause for complaint, but I didnât see any among those whose cries of pain were taken up by a righteously outraged media.
Perhaps the problem is that most political reporters are too young to know how retirement income works. Letâs look at Australiaâs most self-pitying and grasping group, the self-proclaimed âself-funded retireesâ.
What they mean by this term is that they donât get the age pension. What they fail to mention to naive reporters is that they donât get it because theyâre too well-off to meet the means test â notwithstanding the best efforts of their investment advisers to rearrange their affairs so they do.
Whatâs the main reason theyâre too well-off to get the age pension? Too much superannuation savings. Thatâs why I see red every time I hear them claiming to be âself-fundedâ.
Theyâve convinced themselves theyâre fiscal heroes who are saving the government a fortune by not getting the pension. Rather, theyâve scrimped and sacrificed for decades to amass the super savings they have.
But theyâre deluding themselves on both counts. They conveniently forget that their contributions to super were taxed at 15 per cent rather than their much higher marginal tax rate, as were the annual earnings on those tax-concession-enhanced contributions.
And, since 2007, thanks to Peter Costello (who spent his time as treasurer planting time-bombs in the budget), theyâve paid no tax on their super withdrawals.
As a result, a proportion of their super balance is attributable not to their frugality, but to decades of annual tax concessions, plus compound interest on those concessions.
The higher the payout, the higher the proportion of it attributable to tax breaks rather than actual saving. For most of those with super balances high enough to exclude them from the pension, those accumulated tax breaks would greatly exceed the budgetary cost of that pension, sometimes several times over (as in my case).
Thatâs being âself-fundedâ?
Another thing the mediaâs bleeding hearts (middle-class division) donât know is that since withdrawals from super are tax-exempt, the money that allegedly self-funded retirees have to live on far exceeds the modest âtaxable incomeâ they tell you about.
When they cry poor, these comfortably-off people with their hand out donât tell you their goal is to get sufficient assistance from the taxpayer to allow them to avoid dipping into the capital value of the shares and property they want to hand on intact to their offspring â who are, no doubt, just as deserving as they are.
Ross Gittins is the Heraldâs economics editor.
Ross Gittins
Ross Gittins is economics editor of the SMH and an economic columnist for The Age. His books include Gittinsâ Guide to Economics, Gittinomics and The Happy Economist.
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I mentioned this the other day. You spend all of your life building up that superannuation and suddenly you need to start selling it all down to live so to speak. Itâs a hard transition mentally.
Iâm not saying they shouldnât be, after all thatâs what it is there for but itâs a tough mental adjustment.
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Good on you Bacchus!
I know just how hard it is to run a high tech company in Australia - you may have seen the article in the Australian a few weeks ago about my company. I am en route from Beijing where we have sold it since we were unable to get a cent from AUS investors or even AusIndustry. They love it there and are going to host a big trade mission in October flying in experts from around the world.
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Well Albert, we will probably end up selling out to this Company in Houston. Probably for less than it is worth and all jobs locally will be lost.
I will get a big Ford Pickup with gun racks, join Hillsong and drink Shiner beer.
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South Africa saying they couldnât believe Duttonâs comments. Bishop and Turnbull basically telling them to just ignore them because itâs not our policy position. Dutton has the last word effectively saying âwell, itâs my policy position.â
Next Liberal leader folks.
Tends to happen because they assume most people have a similar level of disposable income to themselves. Reality of course being that they donât.
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Honestly canât see that.
May even be lucky just to hold his seat next time around. Get Up is going for him with all stops out.
Fk, Iâd party for a week if he goes.
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One can only hope youâre right. Scary prick, that one.
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Reportedly there are around 2k SA expatriates in Duttonâs electorate. There is also the small matter of Dutton giving special visa approval to two au pairs. Journos just lost an AAT FOI appeal to have the names of the au pair employers revealed.
Duttons njickname is Justa ( carnt )
When will this clown go away?
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