The Federal government is making it easier for small businesses to offer employee share schemes, in a move welcomed by the Pharmacy Guild
In a joint media release with Small and Family Business Minister Michaelia Cash, Treasurer Josh Frydenberg has announced that the Government is simplifying the regulatory framework.
This is aimed at reducing the time and cost burden for businesses, he says.
“Employee share schemes allow employees to invest in the business for which they work,” say the Treasurer and Minister Cash.
“They are offered as an incentive to employees, allowing them to share in the growth and success of the business.
“The current regulatory framework is too complex and fragmented and ultimately discourages businesses—particularly, small businesses— from offering employee share schemes.”
The Government proposes to simplify and extend the current regime by:
- creating a dedicated exemption for disclosure, licensing, advertising and on-sale obligations under the Corporations Act 2001;
- increasing the value limit of eligible financial products that can be offered in a 12 month period from $5,000 per employee to $10,000 per employee;
- expanding employee share schemes to include contribution plans, where an employee can make a monetary contribution to acquire eligible financial products; and
- allowing small businesses to offer employee share schemes without publicly disclosing commercially sensitive financial information unless they are otherwise obligated to do.
“These changes build on improvements the Coalition Government has already made to make employee share schemes more attractive, including improving the taxation treatment of employee share schemes and limiting the requirement for disclosure documents given to employees to be made available to the public,” say Minister Frydenberg and Minister Cash.
Pharmacy Guild Executive Director David Quilty has highlighted that under State and Territory laws, community pharmacies must be owned by registered pharmacists and these small businesses also regularly employ pharmacists.
“Often it is employee pharmacists who buy into the community pharmacy in which they work over time, first as a minority partner and ultimately becoming a majority partner or a full owner,” Mr Quilty said.
“Employee share schemes can help enable committed employees like community pharmacists to invest directly in the small businesses in which they work, giving them real skin in the game and potentially providing a catalyst for longer term succession planning.
“To be value-enhancing for small businesses, there is a need to minimise the cost and complexity of establishing and maintaining employee share schemes, which should also take into account the varying business structures of small businesses.
“Additionally, employee share schemes should recognise that small business employees may be less able to make monetarily large share purchases and should be able to build their shareholdings incrementally over time,” he said.
Mr Quilty said that the Pharmacy Guild encouraged the Treasury and Small and Family Business portfolios to consult broadly in the implementation of these enhancements to ensure they are truly small business friendly.