Australian Small Business and Family Enterprise Ombudsman Bruce Billson interview with Heidi Murphy.
Radio 3AW
Subjects: small business incentives ending on 30 June, International Micro, Small and Medium-sized Enterprises Day, 1 July changes.
Heidi Murphy
For small businesses, a year or two ago at federal Budget time you might have been celebrating some big incentives on offer at the time or talk of it. Big incentives to help you out, instant asset write off and one to help you deal with the electrification expenses. But for reasons that escape me, it's only just passed the Parliament.
How much do you rely on government incentives? Are you using them for things like instant asset write off? And can you get something sorted in the next couple of days to take advantage of the one that's available for this financial year?
Bruce Billson is the Australian Small Business and Family Enterprise Ombudsman. Bruce, thanks for your time this afternoon.
Bruce Billson
Heidi, happy to be with you and your listeners.
Heidi Murphy
What exactly has gone wrong here. Why are we just a couple of days out from the end of the financial year and it's only just through?
Bruce Billson
Small businesses are no doubt cranky and exasperated that measures announced 14 months ago have just passed the Parliament with four days to go. So, what’s happened was pre-budget, last financial year, the Government announced some welcome measures. This was to extend the instant asset write-off for small businesses for capital purchases up to $20,000. Yay, that's great for those in a position to invest in building the capability of their business.
But there was also an important measure of an additional 20% depreciation benefit for people investing in electrification, energy efficiency and the like. And for businesses that's a big deal. The cost-of-living pressures that so many of your listeners talk about Heidi, is real and that appears as cost-of-input pressures for businesses. If you and I are running a restaurant or even a service station that sucks a lot of energy in, with the lighting, the fridges and all that sort of stuff, energy can be a real pain point and it's been going up.
People said yes, this will be a great incentive. It passed the Parliament last night. So, there's four days to evaluate your options, get advice on what's likely to qualify, what’s not, check there’s stock around, get help to install equipment if you need it, have it ready to go, up and about by the 30th of June. This is what’s annoying small businesses.
Heidi Murphy
Today's Wednesday. I've only got two business days left to do it because we're pretty much at the end of this business day, business hours.
Bruce Billson
Yeah, that's where the exasperation comes from Heidi. What can you do with that? And in the end, it seems that people likely to benefit from what should have been a really positive initiative for small businesses wanting to make a contribution to net zero, wanting to be more energy efficient, maybe electrify more where there’s gas that's really getting expensive and has question marks over availability.
And now there’s so little opportunity to do anything about it. It'll just be the businesses that just happened to do that anyway, coincidentally, that will get the benefit and people that might have been nudged into behaving differently - exactly what an incentive is supposed to do – are going to have five minutes to sort that out. So that's really, really disappointing. And understandably, the small business community is pretty cranky about that.
Heidi Murphy
So, does it roll over into next year? Is it available to me as a separate one next financial year?
Bruce Billson
One component is, the instant asset write-off at $20,000 has been announced in the budget just announced in May for the coming year. So that’s been re-announced and re-instigated. But this very important energy incentive has not. It's gone. That's it. So, you’ve got a few days to pop your skates on and try and make your contribution to a lower emissions economy, more energy efficient operations in your business and frankly, to set yourself up for the future. And that's what's so disappointing.
Heidi Murphy
Has the government just been dragging its heels on it, so they don't have to pay out or save a bit of money. What's the go? Not add to inflation?
Bruce Billson
There's a pretty crowded parliamentary program. Up in the capital, there's lots of discussions about ABUMs. I'm sorry about that phrase. That's an announced but unenacted measure.
Heidi Murphy
That acronym needs some work.
Bruce Billson
Yeah. It's not a pretty one. But it makes the point that you can make announcements and create expectations. That's a nice backswing. The follow through is getting the law passed in the Parliament.
In this case it’s gone to the Parliament, there's some tension between different sides of the Parliament. Some wanting to make it more generous and to expand eligibility. Some wanting to extend the timeframe like you were just discussing. That was going back and forward. The Government was saying no, no, we want to implement what we said we're going to implement. And it came down to the last moment where the Senate were basically told by the House of Representatives, no, no, this is it, get on board or it's not going to pass. So, the Senate agreed and rolled over and here we are, a couple of days out to make something of the energy efficiency measure.
Heidi Murphy
Goodness me. Some busy folk with some busy phone calls, I would think. Can we back date the invoice?
Bruce Billson
Well, I wouldn't recommend that.
The context is a little frustrating too. Tomorrow (Thursday) is International Micro, Small and Medium-sized Enterprise Day. We were supposed to be celebrating small and family businesses. Really having them front of mind in the important contribution they make to employment, to vitality in our communities and into our economy. And yet here we've got this largely disrespectful treatment a day before by the Parliament for a whole range of reasons. The net result is for small business people a really important measure, they've got a microscopic amount of time to do something about it. And really the Parliament can do better. I reckon.
Heidi Murphy
I think you're right. I think small businesses have got a microscopic amount of time to junk all of the vapes they might still have to sell as well. From Monday, they're not allowed to. That just passed today as well.
Bruce Billson
Well, nice segue, in fact, from the 1st of July, there's a lot that business owners have to do and it’s a big responsibility. There's changes from national minimum wage award rates, there’s the income tax cuts that I'm sure your listeners will be going, yay, but that's got to change in computer systems to be delivered. Superannuation Guarantee is going up. There's reporting finalisation obligations on single touch payroll. We just talked about those asset write-offs. Engineered stone, that's gone, that's gotta go out the door. So, you know, there's plenty going on.
Heidi Murphy
As long as its all passed the Parliament, all those bits of legislation, Bruce, because the vaping one only just went through today and is meant to take effect from Monday. This other one on the incentives only went through last night and it's meant to finish on Monday.
Bruce Billson
It’s a lot isn’t it. And this is at a time when we know small and family and businesses are time poor. There's no rivers of gold for small and family businesses. The last stats suggested 46% aren’t profitable right now. And for those nearly one and a half million people that are self-employed, creating their own livelihoods, nearly three-quarters of that group are taking home less than average weekly wages. So, there’s no rivers of gold, plenty of upside in shaping your own livelihoods. Great agency, great flexibility, but lots of headwinds and we can do better. We're urging people on International Micro, Small and Medium-sized Enterprises Day, be kindly as a customer to small business, get behind them and let's keep that really important part of our community front of mind.
Heidi Murphy
Fantastic. Thank you Bruce. Bruce Billson, the Australian Small Business and Family Enterprise Ombudsman.
