Last night’s federal budget featured a number of measures designed to help small businesses, primarily:
- $325 to be deducted from the power bills of one million eligible small businesses as part of cost-of-living relief package.
- A temporary increase in the instant asset write-off threshold to $20,000 on a per asset basis for 12 months from 1 July for eligible small businesses.
- A tax incentive worth up to $20,000 to provide an additional 20 per cent depreciation for eligible assets that support electrification and more efficient use of energy.
- $23.4 million over three years for the cyber wardens program delivered by the Council of Small Business Organisations Australia to support small businesses to build in-house capability to protect against cyber threats.
- Reducing the PAYG and GST uplift from 12 per cent to six per cent for 2023-24 income year, to assist SMEs’ cashflow.
- Extra funding for the Tax Office for modest tax administration improvements such as expanded assistance and internal review options and extending the period for small businesses to amend their income tax returns from two to four years.
- $18.1 million for the Department of Finance to improve SMEs’ ability to compete for government procurement.
- Support for small enterprises to adopt artificial intelligence technologies to improve business processes and increase competitiveness.
- $392.4 million over four years to establish the Industry Growth Program to support SMEs and start-ups in commercialising their ideas and grow their operations with funds redirected from the Entrepreneurs’ Program.
- The ACCC establishing a complaints mechanism for small business advocacy groups to raise systemic issues.
The Australian Small Business and Family Enterprise Ombudsman Bruce Billson believes these measures will help small businesses with contemporary challenges.
“There is support for small and family businesses to tackle immediate pressures, particularly with high energy input costs, an asset write-off boost to help re-equip and invest in productivity, tax administration changes that will help with vital cashflow challenges and much-needed advice to deal with cyber security fears,” Billson said.
“Energising enterprise can deliver a stronger economy and these measures are a step towards delivering that,” he added. “It is disappointing to see a reduction in support for the underpromoted Self-Employment Assistance Small Business Coaching program and the Entrepreneurship Facilitators Program. These programs have low awareness and can help with the success and durability of many of the 1.6 million Australians who derive their livelihoods from self-employment and make a vital contribution to the economy.”
Mark Chapman, Director of Tax Communications at H&R Block, welcomed the return of the $20,000 instant asset write-off and SMEs’ access to a new program to incentivise them to buy energy-efficient fridges, electric cooling systems, batteries and other assets that support electrification and more efficient energy use, in the form of a 20 per cent additional deduction for qualifying assets. He cautioned, however, that this initiative is “slim pickings compared to Temporary Full Expensing”.
MYOB’s Chief Employee Experience Officer, Helen Lea, said while outcomes support SMEs in the short term, there is a greater opportunity to enable businesses to make future-focused investments for growth.
“We would have liked to have seen more targeted outcomes for the meaningful digital progression of the sector, to inspire confidence and encourage investments to enhance productivity businesses, and in turn, national growth,” Lea said. “In a market where SMEs need to achieve more with less, we want to see more support to help small businesses to adopt digital tools to increase efficiency.”
Joseph Lyons, Managing Director for APAC at accounting software provider Xero, said that while he welcomes measures that seek to address the elevated cost of living and support small businesses, more needs to be done to drive productivity and digitalisation.
“By introducing measures like the Small Business Energy Incentive, the Government is using its balance sheet to lower operational costs for small businesses by incentivising the adoption of energy efficiency practices – a positive but short-term solution to address inflationary pressures,” Lyons said, cautioning that the Government needs to “prioritise rolling out measures to increase small-business innovation to unlock more efficient processes, driving ongoing productivity long term”.
Beau Bertoli, founder of small-business lender Prospa, described the temporary increase of the instant asset write-off threshold as a “welcome measure for small businesses, enabling them to reinvest in their businesses and grow”. He believes, however, that the government will need to do more to ensure the small-business community has the resources it needs not only to survive, but thrive in today’s climate.
“According to Prospa commissioned research, 84 per cent of business owners said they were expecting major challenges over the next 12 months, driven by increased operating costs (42 per cent), higher inflation (35 per cent) and increased costs of freight and transport due to rising fuel costs (30 per cent),” Bertoli warned.
