While there were certainly some winners in the 2023 Budget, SMEs appear not to have made it on to the podium, according to Banjo Loans CEO, Guy Callaghan.
“The engine room of the Australian economy, employing around 7.6 million people across a wide range of sectors and contributing around $418 billion to GDP1, needs more than this budget offered,” he said.
“As was clearly indicated in the lead up, the 2023 budget was a tightrope walked by the government trying to stimulate the economy and alleviate inflation. The focus was squarely on relieving the cost-of-living pressures for the consumer, particularly the vulnerable, which was laudable.
“However, this resulted in a budget high on positive announcements, but low on detail. Overall, there seemed to be a missed opportunity for further initiatives that could have substantially helped incentivise businesses.”
Callaghan believes the positive outcomes for SMEs included the extension of the $20,000 instant asset write off for another year, power saving incentives like the one-off energy bill cut of $650 for businesses earning up to $50 million revenue, and a tax deduction of up to $20,000 for potentially 3.8 million small businesses investing in energy-efficient equipment and facilities.
“SMEs desperately need workers and are struggling to attract and hire the right resources in a tight labour market. Increasing the Temporary Skilled Migration Income Threshold to $70,000 and boosting visa processing will help but is unlikely to be enough,” he said.
“With over 62% of SME business owners saying they wish to hire additional staff this year, increased subsidies and support to reduce the cost of hiring new employees would have been a welcome move.”
From a technology perspective, Callaghan commended the $23.4 million allocated to help small businesses build in-house capabilities to ward off cyber threats.
“Similarly, the energy tax incentive providing a bonus 20% tax deduction for the cost of eligible depreciating assets that support greener technology investment, is a welcome boost to sustainability for the sector.
“But both initiatives are rather one-dimensional. More incentives for SMEs to upgrade their technology and invest in digital and online solutions would have been a good way to achieve the increased productivity Philip Lowe and Jim Chalmers want.”
Callaghan also welcomed cheaper childcare and domestic violence support measures to help mothers return to the workforce but would have liked to see a stronger incentive aimed at allowing SMEs to hire more women and returning mothers.
“For example, SMEs cannot afford to offer the same working benefits to part-time workers that corporates can. Increases in female workforce participation will help build a more diverse, stronger workforce,” he said.
“Hopefully the positive programs aimed at assisting the consumer and the most in-need Australians will help people who are hurting financially. This will gradually have a flow-on effect to Australian SMEs, but it will be a slow burn.”