What's in the budget for small business?
There’s a lot in Federal Treasurer Josh Fyrdenberg’s latest Federal Budget to encourage small businesses to ‘keep on keeping on’.
The Government has recognised that small business needs much more support to lead Australia out of the post-pandemic economic slowdown and many of the initiatives are sensible.
By ATB Partners
What's in the budget for Small Business?
Some of the highlights of the budget for small business include:
- Tax incentives for training employees: For every hundred dollars a small business spends on training their employees, it will receive a $120 tax deduction.
- Deductions for investment in digitech: Twenty percent (20%) tax deductions for investments in digital technologies such as cloud computing, cyber security and web design.
- An extension to the Small Business instant asset write off scheme: (which allows businesses with a turnover of up to $50 million to write off new assets) through until 30 June 2023.
- Incentives to take on apprentices: A new $2.8bn scheme will provide cash benefits for both employers and employees. This scheme is designed to address labour shortages, and also to offer young school leavers opportunities, many of whom have had career, study and travel plans thwarted by the pandemic.
Major issues still to be addressed
It must be noted that while Josh Frydenberg was delivering his pre-election budget last night, from inside a warm and dry Parliament House, a number of regional areas in New South Wales were again being evacuated under severe weather and flood warnings.
This presented many of us with a stark reminder that the budget didn’t deliver anything around what is becoming a major expense for homeowners, investors and small business – the cost of insurance.
This is something that is going to need to be addressed at a Federal level fairly urgently, although with elections coming in a number of weeks, it is more than likely that it will be put on hold.
Insurance is becoming almost an un-affordable overhead for some. Others have been told by insurers that if they don’t undertake expensive flood mitigation works they will be ‘uninsurable’ in future.
Insurance costs have been mounting for some time – not addressing this issue will cause grave damage to the economy in the long run. It is an issue that small business advocacy groups, such as Business NSW, will have to keep highlighting and lobbying for so that it becomes a key priority for discussion and resolution at a Federal level, sooner rather than later.
Encouraging spending and consumer confidence
The fuel price cuts will be very welcome for all, so long as they are passed on at the pump, and although they are only short-lived they will make a difference right now, as consumers adjust to higher living costs across the board.
As far as the overall economy goes – the prediction for a $78 billion deficit is not an easy pill to swallow, although it’s not a surprise given the amount of Government spending during the pandemic and the funds allocated to natural disaster recovery since the 2019 summer bushfires and the most recent floods.
Hopefully, the financial handouts to lower income earners and concession holders as well as the cost of living tax offset of $420 to low income earners will work as intended, and put cash back into the hands of working Australians, to boost consumer confidence.
Many experts have criticised this year’s budget as short-sighted and nothing more than a ‘pre-election spending package’ designed to win votes. Yes, it’s short-term, but that was to be expected, and in all honesty, it has hit on some of the key pain points for small business, which will hopefully provide the sector with the confidence it needs to ‘keep going’.
The past two years have been tough, and there is still much uncertainty. Small business has a vital role to play in leading Australia out of the post-pandemic slowdown and that’s going to take time.
Certainty for small business
While long-awaited tax reforms for small business have not yet been addressed, which is still frustrating given Australia’s very complicated tax regime, in many ways right now, this is also good for small business.
It means that businesses know where they stand. They can get their settings right, and their planning and continue to move forward with a degree of certainty. Stability is important now, and it will be in the coming months.
It’s also great to see an acknowledgement of the pressures on small business owners with the the announcement of continued free mental health services through Beyond Blue.
In the coming days our team will be going over the finer details of the budget, specifically in terms of how it will impact our clients, and what opportunities they may be able to take advantage of.
Of course, if you have questions or concerns, please contact us.
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