A Real CFO

Budget October 2022-23 – A budget that forgot about small business

Budget October 2022-23 – A budget that forgot about small business

As part of the 2022 Federal Election, the Labor Party promised a “Better deal for small business”.  Sounds great but Labor’s policy document at the time was very light on detail, and in my view this continues in the budget announced last night. 

For example in the Treasurer’s speech the word “business” was mentioned just 3 times.  In the key budget paper, Budget Measures (Budget Paper 2), “Ukraine” is mentioned nearly as many times as “business”.

Here are some of the positive points for small business in the budget announcements:

  • $15m to extend the small business mental health and financial counselling programs.
  • $62.6 million over 3 years to support small to medium enterprises to fund energy efficient equipment upgrades. The funding will support studies, planning, equipment and facility upgrade projects that will improve energy efficiency, reduce emissions or improve the management of power demand
  • Strengthening unfair contract term protections.
  • Hopefully more workers through the provision of 480,000 fee-free TAFE and community-based vocational education places and 20,000 university places and the increase the 2022–23 permanent migration program from 160,000 to 195,000 (assuming the increases can actually be filled).
  • Exempting eligible electric cars from fringe benefits tax.

On the other side here are some of the negative points for small business in the budget announcements:

  • The election promise to help reduce power bills is gone with forecasts for electricity and gas prices to rise sharply over the next 2 years (as much as 30% next year).
  • Reductions in spending on external contractors, consultancies, advertising, travel and legal services may adversely impact revenues of selected businesses.
  • There was $197.7 million over 4 years taken from Entrepreneurs’ Program which includes Commercialisation grants.
  • The Temporary Full expensing provisions (effectively 100% asset write off) that were planned by the previous government to finish on 30 June 2023 have not been extended.
  • No money that I can see to help business around cyber security.
  • No changes to R&D funding.

In addition to the above there is:

  • $15.0 billion allocated over 7 years to establish the National Reconstruction Fund (NRF) to support, diversify and transform Australian industry and the economy through targeted co-investments in 7 priority areas. These priority areas are: resources; agriculture, forestry and fisheries sectors; transport; medical science; renewables and low emission technologies; defence capability; and enabling capabilities.  The co-investments includes loans, guarantees and equity investment.  How much the NRF will apply to small business is still to be determined as appears to be focused on large projects..
  • $1.9 billion Powering the Regions Fund. This will provide dedicated support to transition regional industries to net zero.

Overall, from my perspective, a budget that forgot about small business.

 

If you want some help, contact me below.

 

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