Small businesses not hopeful about budget, says Reckon

Small businesses have been disappointed by budget announcements in the past and, as a result, many are expecting a change of federal government this year, indicating that many feel April’s budget announcements could be short lived, Reckon Small Business Survey – Federal Budget 2019 revealed. 

"Small businesses will be eager to understand what concessions the Coalition can offer if it remains in power. This means they will need to go the extra mile and introduce more substantial benefits to small businesses in order to meet their expectations," Sam Allert, Reckon Group CEO, said. 

Mr Allert explained that small businesses would appreciate income tax reductions expected from the government, and are fearful that a sluggish economy is hurting consumer confidence.

According to Reckon's research, just over half (56 per cent) of business owners say the seven-year personal income tax relief plan announced at last year’s budget benefited them, suggesting more cuts would be welcomed.

"As we approach the election, many small businesses say Labor’s plan to enforce a living wage could harm their revenue. By making changes to income tax rather than adding legislation on wages, the Coalition will have the upper hand with small business owners on this subject," Mr Allert said.

Research from Reckon also showed that 91 per cent of small business owners want to see the $20,000 instant asset tax write-off extended beyond the current timeline. 

"Labor has already pledged to introduce a permanent $20,000 instant asset write-off if it gets into power, offering a more stable prospect for businesses. While Scott Morrison is expected to raise the threshold to $25,000 in the budget, a longer extension will still be in demand. Ultimately, any further tax relief for small businesses is always welcomed, as it means more resources for business owners to re-invest back into their venture," Mr Allert noted. 

Additionally, Reckon revealed that 78 per cent of small business owners say they have seen no benefits since the corporate tax rate was reduced from 30 to 27.5 per cent last year, indicating that larger reductions are desired. 

"In fact, almost half (45 per cent) say a decrease in corporate tax rate is critical to their business success. Policies with a more personal immediate impact are therefore more likely to resonate," Mr Allert stated. 

In terms of housing affordability, 44 per cent of small business owners said they have already been affected by falling house prices and tighter lending conditions imposed by banks. Mr Allert judged that this comes as no surprise, given many small business owners secure loans on their homes.

Reckon’s pre-budget survey also showed that small businesses are expecting the government to provide more subsidies for skills and training.

"In last year’s budget, additional resources were assigned to the Skilling Australians Fund to help create more apprenticeships.

However, this has not been successful for the most part, with Victoria and Queensland rejecting the proposal completely. Labor has already announced plans to increase funding in TAFE and vocational education, and small business owners will be looking for similar assurances from the Coalition," Mr Allert concluded.