14 May 2024
Federal budget could have done more to encourage small business
- Investment incentives for select industries but no shot in the arm for small business
- Energy relief welcome but unlikely to make much impact for most small businesses
- Government should incentivise more young business owners and innovation
- Extra funding to help businesses in distress and mental health a necessary investment
Small business owners across Australia will be feeling a bit underwhelmed by Treasurer Jim Chalmers’ 2024 Federal Budget, says leading accounting body CPA Australia.
In his speech, Dr Chalmers spoke of wanting small businesses to share the big opportunities ahead. We agree. While it’s positive that there was a small business statement highlighting several measures, this budget focused start-up opportunities on its Industry Growth Fund, limiting the initiatives that would encourage more younger Aussies to start or buy a business.
The budget outlined some cost-of-living relief for Australian households, but it only included a small amount of energy cost relief for struggling small businesses.
“Fuel costs, power bills and various other inflationary pressures are having a hugely detrimental impact on many small businesses,” said CPA Australia Chief Executive Officer, Chris Freeland AM.
“Small businesses – most of which already have very thin margins – desperately needed a budget that would help alleviate the cost pressures they are facing on a daily basis.
“While the emphasis on relieving pressures on household finances was expected, a more business-centric budget would benefit all Australians as small businesses are significant contributors to the economy and job creation.”
Many small and medium sized businesses are also feeling overwhelmed by red tape at a time when they need to focus on running their business, not complying with new obligations.
Mr Freeland welcomes the one year extension to the instant asset write off for smaller businesses. However, a more permanent solution would provide the certainty business owners desire.
“While instant write-offs and subsidies for power bills are welcomed, the truth is small business needs more support, particularly those in energy-intensive sectors,” said Mr Freeland.
“The budget confirmed investments in supporting businesses in distress and those facing mental health issues, but there is little in the way of additional funding for programs aimed at preventing businesses getting into trouble in the first place and enhancing business owners’ skills to help these businesses grow.”
As research from CPA Australia shows, Australian small businesses trail behind most countries in the Asia-Pacific region when it comes to business innovation, use of new technology and are ultimately less likely to experience growth.
“Government support for initiatives like cyber-security will help Australian small businesses catch up to their regional counterparts. The rebranded myGov will also bring greater security when interacting with government. These are all steps in the right direction.
“It’s positive that the government continues to talk up the need to build a more productive and dynamic economy. There are many policies essential to achieving those objectives that are in addition to the government’s industry and competition policies,” said Mr Freeland. “Take for instance, the relatively low proportion of Australians under 40 owning their own business. Our annual small business survey shows that increasing the proportion of young Australians starting their own business or acquiring an existing business has a positive influence on business growth and productivity.
“The range of targeted small business support in this budget makes sense, but a more comprehensive look at the sector is needed. We look forward to the proposed National Small Business Strategy that will help business, community and government work together to nurture and grow our economy.”
About us:
About CPA Australia
CPA Australia is Australia’s leading professional accounting body and one of the largest in the world. We have more than 172,000 members in over 100 countries and regions. Our core services include education, training, technical support and advocacy. CPA Australia provides thought leadership on local, national and international issues affecting the accounting profession and public interest. We engage with governments, regulators and industries to advocate policies that stimulate sustainable economic growth and have positive business and public outcomes. Find out more at cpaaustralia.com.au
Contact details:
Simon Downes, External Affairs Lead, [email protected] or 0401 461 503