The 2022 Federal Budget announced this week offers a range of targeted support to Australian small and family businesses that have been welcomed by the industry.
The Council of Small Business Organisations Australia (COSBOA) CEO Alexi Boyd welcomed a reduction of “regulatory burden” on small businesses people, making their lives easier as they focus on recovering from the effects of pandemic restrictions.
“We’re at a time where we risk losing small businesses to the accumulated pressures of the last few years. The loss goes beyond jobs and other economic indicators,” she said.
“Small businesses are essential contributors to culture, community, and the history of a place. Neighbourhoods and towns are often identifiable by the unique mix of shops, cafes, and other small businesses that line their high street. If a small business is lost, part of its community is lost with it.”
The Australian Small Business and Family Enterprise Ombudsman Bruce Billson said the budget represents a “financial and strategic commitment to ensuring small and family businesses are digitally enabled, resilient and have the support, incentives, skills and training needed to be truly competitive”.
The Budget includes several new, extended and enhanced measures to support the central role of small and family businesses in driving employment and economic growth.
Investment in technology, skills & training
Small businesses with annual turnover of less than $50 million will have access to a 20% tax deduction for expenses and depreciating assets associated with digital uptake. This is capped at $100,000 in expenditure, and hardware such as laptops and portable payment devices would also be eligible.
“Deeper digital engagement has been the saviour for many small and family businesses throughout the pandemic and this commitment to help SMEs build their digital capacity is an important investment in their future,” Mr Billson said.
Small businesses with annual turnover of less than $50 million will also have access to a 20% tax deduction for the cost of external training courses delivered to their employees by providers registered in Australia.
Tax changes
Under proposed changes, , the 10% GDP uplift rate that applies to PAYG and GST instalments will be reduced to 2% for the 2022-23 financial year, subject to the legislation being passed in parliament. A proposed update of the PAYG system from early 2024 will allow for PAYG to be calculated in real time, based on the how the business is tracking financially.
“These proposed changed would provide an automatic refund of tax paid in the year if a company with PAYG instalment obligations reports a substantially lesser profit than anticipated or indeed a loss,” Mr Billson said.
The government has also proposed broader measures to utilise technology to help reduce compliance costs and improve processing times for small and family businesses.
Covid recovery support
The Australian Government has pledged $80 million to supporting small and medium export businesses to help re-establish their businesses in overseas markets.
“We’ve heard first-hand from small and family businesses that have had their Covid recovery impaired by closed borders, restriction of movement and disruptions to international supply chains and these measures will be welcomed,” Mr Billson said,
Fuel excise
The budget provides for halving the excise on petrol and diesel to 22 cents per litre for six months.
“This will go some way towards easing this key input cost, particularly for those in the transport sector,” Mr Billson said.
Improved connectivity
Small and family businesses in rural, regional and peri-urban areas will benefit from a substantial upgrade to NBN fixed wireless services.
$480 million has been allocated to extend the coverage range from towers and increase the speed of services to customers. $4.8 million will go towards extending the Mobile Network Hardening Program to support network resilience upgrades in regional Australia.
Payment times reporting
$10.4 million to enhance and redesign the Payment Times Reporting Portal and Register to provide greater transparency about payment times.
Access to expert advice & support
The ASBFEO will receive $8 million to work with proven service providers to offer business planning, capacity building and financial literacy.
A dedicated unit will be created in the Fair Work Commission to support small businesses including with unfair dismissal and general protections disputes.
An additional $4.6 million in funding will ensure Beyond Blue’s New Access for Small Business Owners program can expand and continue to assist small business owners who need mental health support.
$2.1 million has also been allocated to extend the Small Business Debt Helpline for 2022.
Data collection and reporting
The Australian Bureau of Statistics will receive $19.9 million to develop a new reporting application to enable businesses to submit survey business indicators directly through their accounting software.
“Streamlining of data gathering will ease reporting obligations on small businesses and improve the quality of data which provides valuable insights into the small business experience,” Mr Billson said.
Fees
Fees associated with Australia’s Business Registers will be streamlined, including the removal of the company annual late review fee.
Insolvency reforms
A series of further reforms to insolvency arrangements are funded in the Budget, including $22 million to address unfair preference payment rules, $7 million to clarify the treatment of trusts with corporate trustees and just under $1 million to implement recommendations from the Safe Harbour Review.
Missed opportunities
The Australian Lottery and Newsagents Association (ALNA) says while the budget includes measures to lesson the burdens faced by small businesses, there were some missed opportunities around least cost routing of payments, and a national strategy addressing illicit tobacco.
“A significant missed opportunity in this budget was a commitment to make least cost routing of small businesses payments mandatory,” said ALNA CEO Ben Kearney. “This is something that we have been seeking because we know the impact it will have on the cash flow of small businesses. Where merchants can have reliable control of payments routing they can significantly reduce costs. Protecting this is critical to reduce inflationary pressures on payment costs.”
ALNA were also looking for a national strategy and leadership on enforcement to stamp out the “rampant illegal retailing” of illicit tobacco products: “This growing issue sees retailers lose sales, but it also sees our nation lose the revenue that would have otherwise been gained in tobacco excise,” Mr Kearney said.