Federal budget 2022-23: No long-term view to address the debt burden

“This Budget is a broad-brush bid to respond to short-term pressure,” IPA chief executive, Andrew Conway, said.

“The Budget forecasts net debt peaking at 33.1 per cent in 2026. For business to have confidence we must see a plan to tackle Australia’s long-term debt position.”

There was a big win for small business in the budget with $8 million going to Australian Small Business and Family Enterprise Ombudsman.

Mr Conway said the IPA is looking forward to more advocacy to help reduce compliance costs and improve business conditions.

Likewise, a new patent box for the agriculture and low emissions sector will go a long way to promote sustainable innovation practices, however we need to unpack the policy to understand who will qualify for concessional tax treatment.

“Overall, spending money and tax concessions are relatively easy compared to implementing the all-important structural reforms necessary to sustain our forward growth protectory to pay down our debt,” Mr Conway said.

“Ultimately, the people who should be tuning into this Budget are the millennials who will be paying for it down the track.” 

The Australian Small Business and Family Enterprise Ombudsman Bruce Billson said 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, including:

• New tax deductions – Technology Investment Boost and Skills and Training Boost
• Tax system reform and administrative streamlining for small businesses
• Targeted assistance for recovery impaired industries
• $365 million to support an extra 35,000 new apprentices and trainees
• Temporary fuel excise relief
• Changes to procurement guidelines to support SMEs securing Commonwealth contracts
• $480 million to significantly upgrade NBN fixed wireless services
• $10.4 million to redesign the Payment Times Reporting Portal and register to improve efficiency and reporting
• $8 million allocated to ASBFEO to work with proven service providers to enhance small-business capability
• $5.6 million to establish a dedicated unit to support small businesses at the Fair Work Commission
• $4.6 million to support Beyond Blue’s NewAccess for Small Business Owners program
• $2.1 million to extend the Small Business Debt Helpline program
• Further insolvency reforms

In a little more detail these measures will mean that small businesses with an annual turnover of less than $50 million will have access to 20 per cent tax deduction (capped at $100,000 in expenditure) for expenses and depreciating assets associated with digital uptake and 20 per cent tax deduction for the cost of external training courses delivered to their employees by providers registered in Australia.

Under proposed changes, government departments will be required to remove barriers to SME access to Commonwealth Procurement by splitting up major projects, giving smaller contractors a greater chance at competing for the work.
 
The “Pay-on-time” policy will be extended to all suppliers, and the requirement for insurance during the bid process will “generally” be removed.
 
The Department of Defence will also be able to purchase directly from SMEs or use tenders limited to SMEs for contracts up to $500,000.

Under proposed changes, the 10 per cent GDP uplift rate that applies to PAYG and GST instalments will be reduced to 2 per cent for the 2022-23 financial year, subject to the legislation being passed in Parliament.

The government has also proposed broader measures to utilise technology to help reduce compliance costs and improve processing times for small and family businesses. Links between single touch payroll data from the ATO and state governments means tax returns and other forms can be pre-filled – a change the government estimates will benefit about 170,000 businesses that pay payroll tax.

An additional $4.6 million over two years to ensure Beyond Blue’s NewAccess for Small Business Owners program can expand and continue to assist small and family business owners who need tailored mental health support.
 
Additionally, $2.1 million has been earmarked to extend the Small Business Debt Helpline operated by Financial Counselling Australia for free financial counselling.

The Council of Small Business Organisations Australia said the budget provides well-considered structural reform that will greatly benefit small businesses in the medium and long-term, ensuring they are well positioned to recover, grow, and thrive in the increasingly digital world.

“We’re at a time where we risk losing small businesses to the accumulated pressures of the last few years,” COSBOA CEO Alexi Boyd said.

“The loss goes beyond jobs and other economic indicators. 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.”