Setting Plans for 2017
The beginning of the new calendar year is a good time to think about setting plans for the forthcoming year. To develop plans you need to consider the economic background that relates to your industry, location and business.
To analyse the economic background relating to your business you need to:
- Look backwards: what happened in 2016? How did your business perform?
- Look around: what's happening now in your marketplace? You need to consider competitors - what are they doing? What new strategies do they appear to have adopted? What effect will their strategies have on your business?
- Unemployment rates: are they rising or falling in your area? What effect will this have on your business?
- New businesses opening: they might not be direct competitors but are they going to cut into the disposable income that your customers have to purchase products such as yours?
- Market intelligence: have you talked to competitors (remember you can talk to competitors on any issue except pricing)?
- Look ahead: what do you think might happen over the next 12 months?
- Analyse economic forecasts – this will require budgets to be prepared and analysed.
- Extrapolate and then evaluate the responses by:
- "think tank" your research
- prepare budgets
- set strategies that your business can perform to
To set the scene for your forecast for 2017 the following is an indicator of economic forecasts for 2017:
- GDP growth 2.25%
- Consumer prices up by 2%
- Unemployment rate (nationally) 6%
- Forecast Federal Budget deficit for 2016/17 $51 billion
- Interest rate set by the Reserve Bank of Australia currently 1.5%
- Forecast for the middle of 2017 - 1.75%, forecast end of 2017 - 2.25%
- Exchange rate Australian dollar to US dollar end of 2017 $0.77 (currently $0.75)
- Australian Stock Market Index: end of 2017 6,000 points (currently 5,500 points)
ATO to Begin Reporting Tax Debts to Credit Rating Agencies
It has been announced that the ATO will commence disclosing the tax debt information of businesses that have not effectively engaged with the ATO to manage their debt to credit reporting agencies from 1 July 2017.
It forms part of the measure to reign in overdue tax and improve transparency of taxation debts and will initially only apply to businesses that have an ABN and tax debt greater than $10,000 which is at least 90 days overdue.
Grants for SMEs Working in Defence Industry
The Australian government has established the "Centre for Defence Industry Capabilities" (CDIC) to provide a range of services and grants to small/medium enterprise operators who are providing services to the defence industry.
The CDIC will provide advice and facilitation services to assist eligible defence SMEs to improve capabilities, extend networks and take advantage of development opportunities within the defence sector.
Through the advisory and facilitation services an applicant will gain a better understanding of the defence market, learn how to engage with defence and position their business to participate in global supply chains.
By accessing advisory and facilitation services the applicant's business can improve its skills and business practices, become more competitive and take advantage of growth and collaboration opportunities.
Advisory and facilitation services are targeted at defence sector SMEs. SMEs are typically defined as organisations with less than 200 employees; however there is an opportunity for businesses employing more employees to still be accepted to the program.
To be eligible for any of the advisory and facilitation services activities the applicant must:
- have products or services or are developing products or services that have a specific defence application;
- have an Australian business number (ABN)
- eligible applicants must be one of the following:
- a company incorporated in Australia;
- an incorporated trustee on behalf of a trust;
If the application is approved, the business will be assigned a business advisor or facilitator who will work with the applicant to complete the advisory or facilitation service.
Applicants may be able to apply for a Capability Improvement Grant to help with the cost of engaging consultants or experts to implement the recommendations provided in the advisory or facilitation service report.
A Capability Improvement Grant reimburses the applicant for up to 50% of the costs of engaging a consultant or expert and undertaking training recommended in the advisory or facilitation service report.
The minimum grant is $5,000 (excluding GST). The maximum grant is $250,000 (excluding GST).
Many small businesses may believe that, due to only employing a small number of employees, there is no need for employment contracts. Whilst it is not unlawful to have verbal agreements only, an employment contract will stipulate the exact parameters of an employee's role and will also allow complete clarity on the employee's salary.
Another area where employers may also go wrong is that they choose to include their company's policies and procedures within the employment contracts rather than in a separate document, such as an Employee Handbook. The issue that this causes is that when a policy or procedure is required to be updated or a new policy or procedure is implemented, the employment contract must be re-issued to and signed by the employee each time.
After a lot of political horse trading, the "Temporary Working Holidaymakers" Tax (the "Backpacker Tax") has finally been implemented from 1st January 2017. The Backpacker Tax only applies to holders of 417 and 462 Visas.
Employers need to find information relative to the Temporary Working Holidaymakers Rules via the "Visa Entitlement Verification" online tool. Employers needed to register by 31st January 2017 or as soon as they became aware that they would be employing backpackers. Registration needs to be made to the "Working Holidaymaker Employer Registration Form".
Once registration has been implemented and documented employers will need to access the new physical or electronic pay tables for employees via the ATO or the employer's software provider. These tables will enable employers to withhold 15% tax for every dollar, earned by the backpackers with 417 or 462 Visas, up to $37,000.
Employers will have to issue two payment summaries for the year ended 30th June 2017 relative to earnings by the employee and income tax deducted for the period 1st July 2016 to 31st December 2016 and 1st January 2017 to 30th June 2017.
If an employer is not registered as a Working Holidaymaker Employer the employer will have to deduct a flat 32.5% from every dollar of income paid to a backpacker.