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Budget acknowledges small businesses are crucial to Australia’s economic recovery

The federal government’s 2021 budget shows a clear recognition that small and family run businesses are key to the country’s post pandemic economic recovery and future prosperity, according to the Australian Small Business and Family Enterprise Ombudsman Bruce Billson.

Budget acknowledges small businesses are crucial to Australia’s economic recovery
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  • Karen Tan
  • May 13, 2021
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Mr Billson said the budget represents a substantial financial and strategic commitment to making Australia the best place to start, grow and transform a business.”

The federal government has made a $129.8 million commitment to boost small businesses and support people who want to run and expand their own businesses.   

“This initiative will help put the wind in the sails of fledgling small businesses and encourage the Australian entrepreneurial spirit,” Mr Billson says.

“The number of New Enterprise Incentive Scheme (NEIS) places will lift from 8,600 to 12,000 per year for people looking to create their own start-up livelihoods.

“It will also support existing micro-businesses to adjust to changing labour market conditions to ensure these businesses remain viable and resilient to changes in the face of turbulent trading conditions.”

The budget also includes several new, and enhanced measures to support small businesses, including the digital economy which has been pledged $1.2 billion from the federal government for an enhanced digital economy, including a 30 per cent tax offset for the video game industry.

“This $1.2 billion investment will encourage greater digital adoption by small and family businesses, to ensure they are globally competitive,” Mr Billson says.

“We welcome the Australian government’s commitment to help SMEs build their digital capacity and drive business up-take of e-invoicing.

“With 1.2 billion invoices exchanged in Australia every year, making the switch to e-invoicing would add an estimated $28 billion to the Australian economy over 10 years. For SMEs, we know e-invoicing streamlines productivity and improves cash flow with reduced admin and faster payments.”

An additional $12.7 million will be spent on expanding the Australian Small Business Advisory Service Digital Solutions program to assist around 17,000 small businesses.

Other key small business areas to benefit from the budget include; more affordable insurance, the deregulation agenda, tax system reform, and the JobTrainer program which will be extended for another 12 months, as part of a $506 million package to support SMEs to employ apprentices and trainees with a 50 per cent wage subsidy of up to $28,000 per year.

“JobTrainer has proven to be a highly effective incentive for SMEs to take on new apprentices and trainees,” Mr Billson says.

“The cost of apprentices and trainees can be significant as they learn the ropes, so small businesses will welcome the extension of this wage subsidy.

“JobTrainer will also offer thousands of young Australians low-fee or free courses – critically in fields where small businesses are struggling to find staff.”

The Small Business Ombudsman applauds the initiatives outlined in the 2021 budget agenda, and looks forward to seeing business owners do their part to get the economy back on track towards economic prosperity.

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