The budget was delivered last night by Treasurer Wayne Swan. It is his 4th budget and it was aimed to meet targets and promises Julia Gillard set for her government. The government has amed at triming the budget fat, however, there is only a few changes that directly affect small business.

The budget plans a dramatic shift froma deficit of almost $50 billion to a surplus of $3.5 billion in just two years. This is despite recent natural disasters. Wayne Swan is planning to ride the commodities boom, but needs to manage the two speed economy that resources led rebound is creating. There is going to be $3 billion of skill training to help the mining sector, however it doesn't really address the work shortage in other sectors of the economy. The manufacturing industry gets some small assistance, however education and tourism does not get much attention. This could be a major hurdle in overcoming the negative affect of the two economies that are emerging.

Small business is looking for some relief from the tough environment in this budget. Unfortunately, they didn't get it. The government is relying on the mining boom, however the mining boom puts pressure in interest rate increases. This results in people slowing their spending. This is going to be a tough one for the government to manage.

So what is going to affect small business?

• Family Trusts ability to distribute income to minors (children under 18) is significantly reduced. This is currently $3,333 and it will be brought down to $416 with the removal of the Low Income Tax Offset for minors.

• The Entrepreneurs’ tax offset will be abolished from 2012-13. The entrepreneurs tax offset (ETO) is a tax offset equal to 25 per cent of the income tax payable on your business income if you have an aggregated turnover of $50,000 or less (phases out up to $70,000)

• From 1 July 2012, $5000 immediate write off for small business on the purchase of a vehicle with the remaining cost to be depreciated at 15% in the first year and 30% in the following years. This compliments last year's announcement to allow assets under $5000 to be written off from 1 July 2012.

• In a one-off reduction, PAYG Instalments reduced to be 4% above a small business's taxable income in the previous year. You may not actually realise this one has happened to you!

• The company tax rate reduction for small business has been brought forward 1 year to apply from 1 July 2012. This will drop from 30% to 29%.

• Fringe Benefit changes to bring in a uniform 20% rate, regardless of how far the car is driven. This will be phased in over 4 years. The current method encourages people to drive further, however this will benefit those who drive less than 15,000km per year and reduce the tax benefit for those who drive more than 25,000km per year. You can still use the operating cost or log book method and the uniform rate will be easier to administer.

• The easing of the Excess Contributions Tax (ECT) is very much welcomed. This will first time offenders to claim a $10,000 refund from their fund to avoid the tax. Under this controversial tax, anyone who goes over their contribution caps could pay up to 93% tax. Unfortunately, this does not help anyone caught in this situation since the ECT was introduced in 2007.