Government support for small businesses

The Federal Government and the States and Territories are all keen to support the establishment and growth of small businesses in Australia. A robust small business environment has strong flow on effects for the rest of the economy and as such, encouraging investment and training as well as providing grants to budding entrepreneurs are important aspects of government support for small business.

Funding

The difficulty for many small businesses is finding finance to bring their ideas to reality. Many of the best business concepts don’t come to fruition due to the lack of funding available. Fortunately, there are grant programs available through government agencies to support small businesses in finding adequate funds to start up a new business or grow their existing venture. For example, the Repayable Contributions Program offers various avenues of access to funds for small businesses. Some programs take the form of interest-free, unsecured repayable loan, where all or part of the loan is repayable or conditionally repayable depending on the terms and conditions of the contribution agreement. Please see www.grantslink.gov.au for more information on grant programs.

Training Programs

Training assistance programs are another incentive tool that governments have up their sleeves to encourage investment in small business. Some programs provide financial funding to encourage business owners to create long-term employment opportunities, especially with regards to unemployed individuals and post-secondary graduates. Other programs offer wage subsidies to eligible employers in exchange for employers providing job experiences to post-secondary graduates or unemployed individuals.

In addition to money, the government provides a number of programs which offer valuable services and resources. These might include skills training programs, consulting services, mentorship programs, the opportunity to attend trade fairs abroad and introductions to potential suppliers, partners and customers. In many cases, these services would normally bear a substantial cost, so you're not only getting the business building value of the service, but you're saving money, too!

Helpful Government Links

http://www.australiangovernmentgrants.org/programs.php

http://www.ausindustry.gov.au/Pages/AllAusIndustryPrograms.aspx

http://www.grantslink.gov.au/Info.aspx?NodeID=2

http://www.business.gov.au/BusinessTopics/Grantsandassistance/Pages/default.aspx

http://www.digitalbusiness.gov.au/

http://www.accc.gov.au/content/index.phtml/itemId/815214

http://sblegal.innovation.gov.au/

http://www.innovation.gov.au/SmallBusiness/Pages/default.aspx

http://www.smallbiz.nsw.gov.au/

LOST SUPERANNUATION

Did you know that billions of dollars is sitting in lost superannuation accounts waiting for Australians to claim?

Lost super is a special term used to describe superannuation benefits that are recorded in the Lost Members Register. Your super benefits may be recorded as lost if your super fund cannot contact you due to changes in your member details or similar events. You may also have lost super if your account has not received any contributions in the past 5 years. If you change jobs regularly or you have had part-time jobs while at school or university, then it is highly likely that you have more than one super account. On average, every working Australian has three super accounts.

Should I be concerned if I think I have lost superannuation?

Don’t worry if you haven’t kept track of your multiple accounts. It’s never too late, but you must locate your super accounts before you can roll them over into one super account.Generally, your super fund/s sends you a statement each year reporting your account balance and fund returns. If you’re not receiving these statements and/or don’t know which super funds that you belong to, then you have access to plenty of services to help you find your lost accounts, and increase your super benefits instantly.

 

 

 

 

 

How can I find out if I have lost superannuation?

• Use the ATO’s SuperSeeker service (www.ato.gov.au/super) which searches the Lost Members Register and other ATO records, such as unclaimed super money, for your lost super accounts. You can also contact them on the phone for advice and information ( 13 28 65).
• Try AUSfund (www.unclaimedsuper.com.au) which looks after the lost super of millions of Australians for some of the largest super funds in Australia. If they have your super, they will find it free.
• Ask your current super fund if they offer a service for finding your lost super.
• Ask your previous employers for the names of the super funds that received contributions on your behalf

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Australian Market Outlook

Even though economists are positive on the outlook of the Australian share market for the remainder of 2011, there are still some concerning factors which have kept average returns in the red over the past 11 months. The European debt crisis, which began as concerns around Greece and its debt servicing ability seem to have spread further in the European Union, with Ireland and Portugal looking increasingly unstable. Further market instability has been seen with increasing oil prices a result of political instability in the Middle East and North Africa. These factors have kept the Australian market quiet on trade and discouraged investment over the past year. Looking forward we should see some of these issues regarding EU debt ease, although not quickly, as the global economy continues to recover post GFC. China’s economic growth has continued and this has benefitted Australia’s large resource companies as strong demand for its products continues. There may be a slight dampening of such demand as the Chinese government attempts to curb inflation on the back of fast economic growth.

The first six months of 2011 has seen the share market fall short of expectations due to events and concerns beyond our shores. Even so, our economy and the businesses that operate within it continue to grow and rebuild, albeit slowly, from the repercussions of the GFC. The forecast for the Australian economy is very strong for the next couple of years. This view is underpinned by the expectation that unemployment will continue to decline and stabilise around 4-5% as more labour resources are required. This is particularly true for the mining and resource service sectors.

Australia’s terms of trade have recently been upgraded creating an income surge which will quickly flow throughout the entire economy with workers, corporations and the government all benefiting.  Recent concerns regarding US debt have also had a negative effect on the All Ordinaries. However, recent developments suggest this too is improving with retail sales and production figures up and a trillion dollars’ worth of government spending cuts agreed upon in principle by the US government.

The mood across global markets appears to be decidedly downbeat and the reality is that 2011 was always going to be a tough year. In the short term at least it appears the australian market will continue to respond to poor global conditions and fears of another GFC.  However the outlook for the Australian economy is improving and we would expect this economic strength to be reflected in the market movements hopefully toward the end of this year and into 2012.

*The advice provided is of a general nature only. Everyone's financial situation varies so please contact a financial planner at EFS on (02) 9868 3900 for a financial plan that meets your needs.

Elite Financial Solutions ABN 32 077 847 486 provides its financial planning services as an Authorised Representative of Count. ‘Count’ and Count Wealth Accountants® are the trading names of Count Financial Limited, ABN 19 001 974 625. AFS Licence Number 227232. Principal Member of the Financial Planning Association of Australia Limited.

AUSTRALIAN SHARE MARKET OUTLOOK

First home buyers: Choose the right home loan and get ahead

Looking for a home loan can be daunting.  And with the recent rise in interest rates (and future rises expected), finding a competitively priced loan is more important than ever.

With so many home loan products on the market, first home buyers need take heed when comparing loans and make sure they get the right advice from a lending professional.  Do your homework and look for loans with features that will save you money over the long term, rather than looking for a short term fix.

Low introductory rates are one tactic banks and financial institutions use to attract customers.  What appears to be a good interest rate in the beginning, can often only apply for a few months.  From there on, the interest rate skyrockets and the loan ends up costing you more in the long run than a loan which has a standard rate.

First home buyers should be aware of any additional costs before getting locked into a loan.  Flexibility is one of the most important components to look for.  A loan that has high exit fees or penalises you for making extra repayments is locking you into the loan – discouraging you from looking for a better deal elsewhere and possibly refinancing.

Likewise, beware of any broker who charges exorbitant fees or recommends loans with a very high interest rate, as they are not likely to have your best interests at heart. A reputable loan adviser will go through a range of loan and repayment scenarios to help you decide which suits your needs best and will then recommend loans accordingly.  They should not pressure you to take up a loan which you are obviously not comfortable with.

Making certain you are comfortable with the repayment structure is one of the most important considerations when choosing a loan. Having the ability to make regular repayments is one thing, but you should also make sure that the loan structure allows for further interest rate rises.  A loan which doesn’t allow this buffer, may expose you to trouble later down the track if your repayments increase and you are unable to afford them.

Getting the right advice and shopping around early seems to be the key to choosing the right loan and owning your home faster.  Whether you are taking out your first loan or refinancing a current loan, advice from a qualified adviser can make a world of difference and could mean you save thousands of dollars over the term of your loan.

For more information on choosing the right loan for you, please visit http://www.elitefinance.com.au/ or call (02) 9868 3900 and make an appointment with one of our qualified financial advisors.

Is a Self Managed Superannuation Fund right for me?

SMSFs an attractive option: top 6 benefits of Self Managed Super Funds

About one third or $420 billion of superannuation savings in Australia is now held in Self Managed Super Funds, or SMSFs, says Christine Hallowes from EFS, part of the Count Wealth Accountants network.

 

Also known as a ‘Do it Yourself’ or ‘DIY Fund,’ a SMSF is a super fund you set up and manage yourself, in contrast to employer and retail super funds which are managed by professional trustees and managers. “A SMSF member becomes their own fund’s trustee and can seek advice from experts like accountants, financial planners and lawyers when they need it,” says Christine.

A key benefit for many is greater investment choice, which can be tailored to specific retirement goals.

“As well as the conventional asset classes of cash, fixed interest and managed funds, SMSFs also have access to investments such as residential and commercial property and direct shares. For example, business owners may seek to make their business premises an asset of their SMSF.”

Christine also advises that a SMSF can be an excellent vehicle for holding death and disability insurance, giving you and your family peace of mind. “Premiums for death and disability insurance are tax deductible in the SMSF (unlike in situations where death and disability insurance are held outside superannuation), and may be funded from your super contributions or fund account balance.”

Christine notes that, subject to certain rules, a SMSF can also borrow to invest in assets such as residential or commercial property.  “These assets are then held in the tax effective superannuation environment, which can result in a significant boost to your retirement savings.”

Once you reach age 55, you can start a pension in your SMSF. Earnings and capital gains from the investment assets that support a pension are not subject to tax in the fund. According to Christine, “by timing asset sales in a SMSF to take advantage of these rules, substantial tax savings can be achieved. That said, it is essential that your fund be reviewed to work out whether this strategy will be effective - which is where a good financial adviser comes in.”

Christine points out that self managed super funds may allow added flexibility in determining how your estate will be paid after your death. “For Australians, superannuation is often the largest asset after the family home so it may be a substantial part of your estate. Therefore, it’s important to ensure that your superannuation funds are paid to your dependants in the most tax effective way.”  Christine advises that, when determining the best way to pay your superannuation benefits on death you should consider factors such as tax, family circumstances and other estate assets.

Finally, Christine notes that a pension drawn from a SMSF may allow you to draw tax efficient pension payments to supplement your income as you approach retirement. “You could “salary sacrifice” your employment or business income into the SMSF, while at the same time receiving pension payments. Salary sacrifice contributions are taxed at 15% rather than your marginal tax rate. Pension payments are tax free over age 60 and otherwise are taxed advantageously.”  As mentioned, assets that support a pension are subject to zero tax in the fund.

Christine Hallowes is an Authorised Representative of Count Financial Limited, an Australian Financial Services Licence Holder (No. 227232) and Australia's largest independently owned network of financial planning accountants and advisers.

The advice provided is general advice only as, in preparing it, we did not take into account your investment objectives, financial situation or particular needs.  Before making an investment decision on the basis of this advice, you should consider how appropriate the advice is to your particular investment needs, objectives and financial circumstances.

Please visit http://www.elitefinance.com.au/ for further information on how a SMSF could be right for you.

How will the carbon price affect you?

The announcement yesterday by the Gillard government of a $23 a tonne carbon price from July 1, 2012 may mean many things for you and your business. Whilst the tax is targeted toward the 500 or so largest polluters in the nation, the flow on effect in prices may have an impact on your overall financial position.

Families in the lower to middle income range should be, at least initially, compensated through tax cuts and welfare increases. However, for many middle income earning families the tax will have some impact on overall financial position. For example a family with two dependant children earning a combined income of $90,000 a year can expect to be out of pocket by around $120. This increases as taxable income rises. A personal calculator can be found on the Clean Energy Future website which estimates the impact of a carbon tax on you and your family:
https://www.cleanenergyfuture.gov.au/helping-households/household-assistance-estimator/

For small and medium business the carbon tax will also have a real effect on operating costs in the short term. The government has taken the step of increasing the instant asset write-off from $5,000 to $6,500 for purchases after July 1, 2010 which is a step in the right direction. Despite this, there will be increased energy, inventory and other costs passed on that will not be reimbursed by the government. The government has also provided information for small business on their clean energy website:
http://www.cleanenergyfuture.gov.au/helping-business/business-and-a-clean-energy-future/

Every business and individual circumstance will vary and therfore it is important to consult your tax and financial professional for more specific advice.

Please visit our website for more information: http://www.elitefinance.com.au/