Small Business Owners Express Disappointment with Budget 2024, Believe More Support Could Have Been Provided for Retailers
The Institute of Public Accountants also expressed that the budget is lacking genuine tax reform and targeted red tape reduction.
Retailers and accountants highlighted the federal budget’s failure to provide sufficient support for small businesses, particularly amidst a cost-of-living crisis.
“In our pre-budget submission, we urged the government to extend the small business tax rate of 25 percent to cover medium-sized businesses with revenue up to $100 million, up from the current threshold of $50 million. We are disappointed that this recommendation was not taken up,” stated Paul Zahra, CEO of the Australian Retailers Association (ARA).
Similarly, Institute of Public Accountants (IPA) CEO Andrew Conway voiced that small business owners were not pleased with the budget, citing the absence of genuine tax reform and targeted red tape reduction.
“It is crucial for the government to acknowledge the pivotal role small businesses play and the significant challenges they face,” Mr. Conway remarked. “When small businesses struggle, Australia as a whole suffers. Immediate assistance is needed to ensure their viability and prevent their closure.”
Currently, there are 2.5 million small businesses across the country, contributing over $500 billion to the economy and employing approximately 5.2 million people.
Related Stories
However, CPA Australia’s research indicates that small businesses in Australia fall behind most countries in the Asia-Pacific region in terms of innovation and adoption of new technologies.
“Government support for initiatives like cyber-security will assist Australian small businesses in catching up with their regional counterparts. The revamped MyGov will also enhance security when engaging with the government. These are positive steps,” stated CPA Australia CEO Chris Freeland.
“The targeted small business support in this budget is sensible, but a comprehensive examination of the sector is required. We anticipate the proposed National Small Business Strategy, which will foster collaboration between business, community, and government to nurture and enhance our economy.”
While the budget includes an extension of the $20,000 instant asset write-off for small businesses with turnover under $10 million, as well as a $325 energy relief rebate for up to a million small businesses, IPA’s Mr. Conway noted that business owners may no longer be inclined to invest in aging capital assets until they see an improvement in profitability.
Mr. Zahra from ARA also emphasized the need for investment in recycling infrastructure, which he believes the budget overlooked but is crucial for meeting Australia’s circular economy goals, particularly in areas such as textile, food, and plastics waste.
What’s Allocated to the Small Business Sector
Moreover, the budget has allocated $25.3 million to enhance payment processes for small businesses, along with an additional $23.3 million to enhance productivity and combat payment redirection scams.
In addition, $20.5 million has been earmarked for the Fair Work Ombudsman to support small business employers in complying with workplace laws, and $60 million for the Productivity, Education, and Training Fund to support initiatives that bolster workplace productivity.
The Industry Growth Program will receive $392.4 million to aid start-ups and small businesses in innovating and commercializing their ideas.
As part of the clean energy transition, $62.6 million has been allocated for Energy Efficiency Grants for the Small and Medium-Sized Enterprises program, offering businesses up to $25,000 in energy upgrade funding.
An additional $290 million in budget funding will extend the $20,000 instant asset write-off for depreciating assets until June 30 next year to help small businesses address labor and skills shortages.
The government is also investing $88.8 million to provide 20,000 fee-free TAFE places in construction-relevant courses and 300,000 places in priority skills areas.
“The government acknowledges that some small businesses continue to face challenges due to inflation, high operating costs, natural disasters, cyber threats, and labor shortages,” stated Minister for Small Business Julie Collins.
“That’s why the government is implementing practical measures to alleviate the pressure on small businesses. Our focus remains on simplifying business operations, improving regulatory frameworks, and assisting small businesses in thriving in the digital economy.”
Businesses Commend Tax Cuts, Energy Bill Relief
Despite the criticisms, ARA’s Mr. Zahra praised the budget for reducing the 19 percent income tax rate to 16 percent and the 32.5 percent tax rate to 30 percent.
He also welcomed the $300 energy bill relief, extension of superannuation on government-funded parental leave, crisis support, and emergency relief.
“We appreciate the measures that alleviate cost-of-living pressures and boost confidence during challenging times, which will have a positive impact on the retail sector,” Mr. Zahra noted.
The Australian Food and Grocery Council (AFGC) also commended the budget’s emphasis on manufacturing.
“Modernizing the food and grocery manufacturing sector through innovative green technologies aligns with the objectives of investing in a Future Made in Australia. This move will help future-proof the sector, which sustains over 270,000 jobs in Australia,” said AFGC CEO Tanya Barden.
At the upcoming Small Business Ministers’ Meeting in June 2024, the government plans to explore options for a National Small Business Strategy to establish a coordinated and unified national approach.
