Jim Chalmers reiterated that Australians will be facing tough economic times in the years ahead as the country battles global economic headwinds, but he said the budget delivers on the priorities of the Australian people.
For small business, there was little in the way of immediate relief, but the Council of Small Business Organisations, the Australian Chamber of Commerce and Industry, the Australian Small Business and Family Enterprise Ombudsman and the Institute of Public Accountants said it was a responsible budget that suited the times.
Tony Greco, general manager, technical policy, for the IPA said the budget was definitely more a family-friendly budget with relatively few business measures.
“Small business measures were almost non-existent,” he said.
“There are some land mines ahead for the tax profession with increase funding to the ATO for more compliance work in the personal tax space particularly around over claiming deductions, shadow economy income.
“The Tax Practitioner Board will also receive extra funding for compliance into-high risk practices and unregistered preparers so the bad apples in the profession can expect some unwanted love.
“The big surprise on the night was off market buyback announcement. This was something we have advocated for in the past. Every time a large listed entity undertakes an off-market buyback, there is a cost to the taxpayer for the uneven distribution of franking credits despite a penalty debit to the company’s franking account.”
Australian Chamber of Commerce and Industry chief executive Andrew McKellar said the budget is a responsible one, but now the hard work must begin to maintain momentum.
“This budget covers the essential elements of economic management and tackling growing cost pressures. However, longer term structural challenges that threaten to hold us back will need continued, and rigorous, attention,” Mr McKellar said.
“As the budget warns, we cannot afford to be complacent against the global headwinds of severe inflationary pressures, climbing interest rates and soaring energy prices.
“Whilst this budget takes a first step towards fiscal repair, long-term challenges remain considerable.”
COSBOA CEO Alexi Boyd said the budget delivers benefits for small-business owners and sole traders in four key areas, namely: improved internet connectivity, small-business mental health support, cost-of-living improvements to childcare support, and VET & skills planning.
“It is critical to ensure the benefits flow through to small businesses. They must be included in the design and implementation of all of these measures,” she said.
“Small business owners have been waiting for this budget to provide them with certainty of the business horizon so they can plan for their futures.
“As 98 per cent of businesses in Australia are small and medium sized enterprises and a third of this group are sole traders, the small business sector is a major stakeholder in this budget and its impacts will be felt in almost every home across the country.”
Australian Small Business and Family Enterprise Ombudsman Bruce Billson said the budget will provide welcome capability building, mental health and financial advice support for small businesses and incentives to grow, transform, and become energy-efficient.
“The combined $15 million in the budget for mental health and financial counselling support was really important,” he said.
“For many small and family business owners, their identities are interwoven into their business and the stakes are so much higher than just a job. Many people have invested a lifetime, and in some cases their family home, into building up their business, which amplifies the emotional challenges.”
Mr Billson said while that support was extremely welcome, it has been partly paid for by redirecting the $8 million announced in the March budget for the My Business Future program.
The extra childcare funding will particularly support the growing cohort of female entrepreneurs starting or leading a new business in recent years.
Along with the one-off incentive for older Australians to work more hours without losing benefits, it will also go some way towards helping mitigate skills shortages and the extra fee-free TAFE and vocational education places will address some of the longer-term skills challenges.
“Small and family business owners are literally exhausted. They are struggling to make rosters work and keep doors open due to labour and skills shortages; grappling with supply troubles that means critical inputs, goods and services are not always available, on edge about cyber security fears and some are fighting floods and other natural disasters,” Mr Billson said.
The budget forecast that inflation will be 7.75 per cent at the end of this year and still high at 5.75 per cent by the middle of next year and 3.5 per cent in mid-2024 tells small and family businesses they will face sustained cost pressures on their businesses.
At the same time, the budget forecast of lower economic growth and a rise in the unemployment rate, plus the likelihood of further interest rate rises from the Reserve Bank, showed conditions will be more challenging.
“Small businesses have a proven track record of lifting our nation. Remember, coming out of the global financial crisis, almost 60 per cent of the new jobs were created by small employers even though the sector only accounted for 40 per cent of the workforce,” Mr Billson said.
“We continue to urge the government to support small businesses and believe energising enterprise can deliver a stronger economy.
“Small business is a dynamic and fast-growing sector that allows people with an entrepreneurial spirit to pursue their dreams and energising this will help increase the $438 billion contribution small business makes to the economy.”
