7th October, 2020
The Government’s business-focused Budget is a welcome sight for weary SMEs, but it’s the additional attention given to digitising business, empowering female entrepreneurs and a push for deregulation that makes this recovery budget a winner.
While this Budget didn’t contain everything small businesses had hoped for — like cuts to the corporate tax rate, or some flexibility around industrial relations — it goes a long way in helping small businesses recover from a shocking year.
MYOB’s chief executive Greg Ellis, says the Budget is a “course back to economic prosperity”.
“Our recent survey of 1000 Australians found eight in 10 wanted to see SMEs a priority in the Budget,” said Ellis.
“Tonight’s revealed measures demonstrate the Federal Government has been listening and has taken positive steps toward reinvigorating Australia’s economy.”
Sign up for added insights and business-critical news from MYOB.
The crowning achievement of this Budget is contained in a series of measures that help businesses get back on their feet.
In particular, extending the Instant Asset Write-off scheme (which has been referred to as Temporary Full Expensing) will be a lifesaver for businesses suffering due to the COVID19 pandemic.
The fact businesses can now purchase equipment without having to worry about depreciating that purchase over several years, or in fact, not having to worry about any limits at all makes their lives much easier.
Additionally, a raft of regulatory cuts and changes worth $5.8 billion, including the changes to fringe benefits tax (FBT) rules and exemptions for businesses with turnover between $10 million and $50 million, are a great start.
It isn’t just the tax or revenue-focused incentives that gives businesses hope. The Federal Government has apportioned significant sums of money to critical areas of the business community.
In particular, an additional $35.9 million for the Boosting Female Founders Initiative, and the $25.1 million to fund 500 women through STEM cadetships or apprenticeships, is welcomed.
A further $24.7 million to help small businesses operators adopt new technology will also help entrepreneurs and business owners prepare for the future. An additional 10,000 places for the Australian Small Business Advisory Service — Digital Solutions program is a win.
The biggest missing piece here is the lack of a corporate tax cut. In our survey it was the most sought-after change, and tonight’s Budget didn’t deliver one.
Other digital changes, like the adoption of eInvoicing for government agencies, are welcome — but don’t go far enough to create meaningful, immediate change for Australian businesses.
“Mandating B2B eInvoicing by industry will assist the smooth adoption of digital transactions and address cashflow as a number one concern for SMEs – of critical importance in this recovery phase,” Greg Ellis said.
READ: Federal Budget 2020 — Investment in jobs and skills to help businesses ‘fight back’
Hopefully, the Government will continue to do more – like helping businesses with even more incentives for digitisation.
“We also propose that a tax incentive to enter the digital ecosystem would help SMEs overcome barriers to adoption and allow them to concentrate on the benefits afforded by digitisation. This could take the form of an extension for Instant Asset Write Off for software solutions,” Greg Ellis said.
Before the Budget, we asked more than 1,000 Australian SMEs what they wanted to see. How did this year’s Budget stack up?
|A lowering of the company tax rate (31%)||No tax cut, but the Government will allow businesses to offset losses from 2018-19|
|Cutting of red tape / removal of bureaucratic processes (26%)||More than $5.8 billion cut in FBT rules and regulatory exemptions|
|More support for training and apprentices (24%)||A new 50% wage subsidy for a new or recommencing apprentice or trainee.|
|Subsidies for businesses employing young Australians looking for work (22%)||The JobMaker hiring credit is a cash incentive to hire Australians looking for work|
|Conversion of the instant asset tax write-off to a permanent policy (20%)||99% of businesses can now write of any eligible asset with no cost limit|
|More flexible industrial relations system (18%)||Unfortunately, there was no new information on IR changes in this year’s budget|
Overall, Australian business owners, as well as their accountants and bookkeepers, can be satisfied the Government is taking their future seriously. But, with a seemingly endless number of changes and new stimulus measures to account for, it’s left up to business owners to ensure they have the correct information in order to maintain compliance.