News Pulse for July 31, 2017

A daily download of SME, startup, fintech and tax news from around Australia.

Family trusts run deep

The fact that Opposition Leader Bill ShortenHon Bill Shorten MP,  Federal Member for Maribyrnong Leader of the Opposition from 13.10.13’s crackdown on family trust income splitting was being described as “courageous” yesterday is a pretty good indicator of the special place that trusts have in the hearts of Australian business people.

It is, or at least should be, a no-brainer: income splitting is a device that should have been removed long ago, but ever since the failure of John Ralph’s effort to clean up trusts in his Review of Business Taxation in 1999, which was buried by the National Party , trusts have come to be the structure of choice for Australian small businesses, and splitting the income an annual accounting ritual.

 

Labor’s trust crackdown to exclude charities, farms

Charities and farmers will be spared Labor’s pledge to crack down on trusts, robbing the Coalition of some of its ammunition as it prepares to take on the Opposition in the inequality debate.

As forecast this week by The Australian Financial Review , Labor leader Bill ShortenHon Bill Shorten MP,  Federal Member for Maribyrnong Leader of the Opposition from 13.10.13 will focus on the use of trusts and other tax loopholes by high wealth individuals while enabling the continuation of the legitimate use of trusts for asset protection and succession planning. These exemptions will include charities and agribusinesses.

Small businesses are getting fed up with big banks

It’s no secret that, following the financial crisis, small and mid-sized business (SMB) owners have been long on complaints and short on love for their banks.

While lending restrictions seem to be easing somewhat recently, SMBs have struggled mightily in terms of getting approved for business loans. But it’s not just the difficulty of securing lines of credit or business loans that have SMBs unhappy. Business customers have also been vocal in complaining about the lack of leading-edge products and digital solutions available to them from their primary banking partners.

 

Labor to tax family trust distributions at a minimum 30pc

Labor’s plan to impose a 30 per cent tax on distributions from family trusts will hit 198,000 supposed small businesses but many of these are self-classified by high-earning individuals and not actual active businesses, the opposition says.

The other 120,000 trusts to be hit are “pure income-splitters”.

Australia leads non-core markets in fintech investment deals, but what does the sector need to grow?

Australia has emerged alongside Brazil as a leading fintech market after facilitating the largest fintech investment deals outside of the core markets of Asia, Europe and North America in the past 12 months, a  report from CB Insights has found.

The Global Fintech Trends report analysed global trends and found that half of the 10 largest fintech deals outside of core markets took place in Australia between the second quarter of 2016 and the second quarter of 2017. The remaining four took place in Brazil, and one took place in South Africa.

Australia leads non-core markets in fintech investment deals, but what does the sector need to grow?

Australia has emerged alongside Brazil as a leading fintech market after facilitating the largest fintech investment deals outside of the core markets of Asia, Europe and North America in the past 12 months, a  report from CB Insights has found.

The Global Fintech Trends report analysed global trends and found that half of the 10 largest fintech deals outside of core markets took place in Australia between the second quarter of 2016 and the second quarter of 2017. The remaining four took place in Brazil, and one took place in South Africa.

Sydney fintech Prospa just secured a $20 million debt facility from Partners for Growth

Small business lending startup Prospa has reportedly secured a $20 million debt facility from the Australian arm of Partners for Growth.

The AFR reports that the new money, which follows a $25 million capital raising round in February led by AirTree Ventures, will go towards product development as well as potential acquisitions of other fintechs.

‘Australia: a small business success’ – Address to The Sydney Institute | The Hon Michael McCormack MP

Every morning, almost one in two Australians goes to work in a small business.

Every morning, the wages of 5.6 million of us are paid and our communities are served by 3.2 million small businesses.

So every time Australia’s economic indicators show more people in work, more growth in our economy or even more choice on our supermarket shelves, the sector doing the heavy lifting is always the same: Small business.

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