The Federal Government has unveiled new spending cuts in a bid to achieve a budget surplus next year and turnaround its $37 billion deficit, but small businesses need not worry unnecessarily as most of these cuts apply to public service and do not directly affect SMEs.

A reduction in superannuation co-contribution, the deferral of four tax reforms and a $5000 baby bonus cut are among some of the most drastic measures in what is being termed as Treasurer Wayne Swan's 'mini-budget'.

The Council of Small Business of Australia's executive director, Peter Strong, told Smart Company that the budget was not particularly damaging, particularly in light of recent governmental initiatives to help small businesses.

"I've seen worse budget cuts over the years. From all we're hearing, the European crisis has a lot of people quite concerned. There needed to be a response and I think this is a responsible one [on the part of the government]."

As part of the mini-budget, or the Mid-Year Economic and Fiscal Outlook, the public service is expected to cut capital spending by 20 percent and increase efficiencies (via the efficiency dividend) by 2.5 percentage points.

An estimated $1.49 billion will be saved, with Finance Minister Penny Wong promising there will be no forced redundancies. Furthermore, 26 cultural and indigenous government agencies, courts and tribunals will be spared from the efficiency dividend changes.

However, changes to the public service may marginally affect small businesses- especially in Canberra- as the level of government spending with these businesses falls. This can include businesses ranging from consultancy firms and real estate companies to food and retail outlets.

This effect may be largely offset by various government initiatives to small businesses, such as increased lending to small businesses, tax reform measures and advice to SMEs, which were discussed by the Minister for Small Business Senator Nick Sherry last week.

These include:

Covered bonds

The Banking Act has changed to allow banks to issue covered bonds (overseas investment vehicles), which will not only help the financial sector safely lend in the near future but also increase access to credit for small businesses.

Reduction of interest withholding tax

In 2013-14, the government will reduce interest withholding tax on offshore funds borrowed by small financial institutions or small local subsidiaries of overseas lenders to five percent.

According to Senator Sherry, this will "remove existing distortions to how financial institutions borrow from overseas, allowing funding choices to be based on commercial considerations, rather than taxation."

Personal Property Security reforms

The personal property security reforms will increase efficiency and access to finance for small businesses by introducing a single national registry governing the use of personal property as security.

You can view Dun & Bradstreet's guide to PPSR here  and find out more on how the act will affect your business here.

Cash flow assistance

The instant tax write-off amount has increased from $1000 to $6500 and will apply to more than one new asset, which will help SMEs boost their cash flow cycle. The Pay As You Go income tax installment will also be reduced and more information can be found here.

Superannuation Clearing House

The Superannuation Clearing House, administered by Medicare, transfers superannuation on behalf of small businesses employing less than 20 staff.