SmartCompany, May 10, 2017
The SME community has found plenty to like in a budget the Treasurer says is aimed at “backing in” small business, but entrepreneurs remain hungry for policies that help with the day-to-day challenges of running a business.
“Small business owners are out there fighting for growth in their businesses every day. They deserve our respect and support,” Scott Morrison said when he took to his feet in the House of Representatives last night.
Tuesday’s budget papers include pledges to extend the widely popular $20,000 instant asset tax write-off for one more year, drive state governments to cut red tape for business with $300 million in incentives, deliver funding to advanced manufacturing projects and put scrutiny and new levies on Australia’s big banks.
Council of Small Business Australia (COSBOA) chief executive Peter Strong says commitments to infrastructure spending and red tape reduction can only help small businesses conditions, and overall, he thinks the budget has a lot to offer SMEs.
“We’re happy, we’re very pleased,” he told SmartCompany this morning.
“It’s about confidence now … business confidence is up, now we need to get consumers spending,” he says.
Before the budget, the Labor Party had implored the government to focus on “practical policies” rather than delivering handouts to the bigger end of town.
While Labor is expected to support measures for small business, including the instant asset write-off extension, Shadow Minister for Small Business and Financial Services Senator Katy Gallagher has taken issue with the government’s approach to putting scrutiny on the big banks, as well as the plan to allow first home buyers to salary sacrifice deposits through superannuation.
“In terms of the proposed new complaints authority for banking customers, simply rebadging existing complaints bodies will do nothing to stop the wrongdoing that has led to thousands of Australians being ripped off by their banks or financial advisers,” she said in a statement with Shadow Treasurer Chris Bowen.
SmartCompany contacted Senator Gallagher to find out if the Labor party will support the government’s budget measures for small business but she was unavailable to provide comment prior to publication.
The extension of the instant asset tax write-off and commitment to red tape reduction are two of the most popular budget measures among SMEs, with small business groups saying these have actual tangible benefits for business operators.
Australian Small Business and Family Enterprise Ombudsman Kate Carnell said the only issue was the extension didn’t go far enough; Carnell is advocating for a lift in the amount that can be claimed to open the opportunity up to farmers and small business owners with more expensive equipment requirements.
“We would have liked a lift in the $20,000 threshold for the instant asset write-off because for some industries, like farming, the $20,000 threshold is too low to enable them to purchase equipment,” Carnell said last night.
However, David Spurritt, executive director and taxation consultant at Bentleys SA, tells SmartCompany that while the write-off policy has key benefits, aside from the 12 month extension, there aren’t many big wins for SMEs in this year’s budget.
“If the scheme is beneficial to businesses to promote growth then we also need to ask why this is not a permanent measure for SMEs,” he says.
Scrutiny on the banking sector has been broadly welcomed, after months of discussions around the clarity of communications between the banks and SMEs on things like loan terms.
On plans to improve competition in the banking sector, COSBOA’s position is clear: “Good on them,” says Strong.
Despite a pre-budget push for the government to come to the table on legislating maximum payment times, there were no formal efforts in the budget papers to tackle the impact of late payments on smaller suppliers.
Carnell says it’s disappointing calls for a National Payments Transparency Register were also ignored.
“We will continue to push on this and talk further with the government on the benefits of businesses gaining the economic benefits of being paid faster, which frees-up cashflow and stimulates jobs, investment and growth,” she said in a statement on Tuesday evening.
Some entrepreneurs observed that while the government made an explicit commitment to supporting SMEs, sole traders and micro-businesses received little to power their growth forward, particularly in regional areas.
“More is needed from the government that takes into account the real smaller players — the one-man-bands, freelancers, self-employed and micro-businesses owners,” Invoice2Go founder Chris Strode says.
“I would like to see funding going towards establishing tech incubators in regional areas … The skills and passion is out there in these areas and it’s not being channeled.”
While continued support for SMEs to grow into new markets was a key theme of budget rhetoric, SMEs in the information and communications technology space were also disappointed tech policies didn’t focus as much as they could have on education.
“We were pleased to see the investments in the Cyber Security Advisory Office, backing of our fintech sector, and the commitment to improving student outcomes,” Anthony Wong, head of the country’s peak ICT body, the Australian Computer Society, said.
“However, at a time when the performance of Australian students in science and maths is declining, the ACS supports a stronger focus on building digital skills and digital literacy in Australian classrooms. This must be a critical economic and policy priority.”