Budget ‘could have done more’ to encourage small businesses say CPAs

BUDGET REACTION – Small business owners across Australia will be feeling a bit underwhelmed by Treasurer Jim Chalmers’ 2024 Federal Budget, according to leading accounting body CPA Australia.

In his speech, Dr Chalmers spoke of wanting small businesses to share the big opportunities ahead – and certified practising accountants' body CPA Australia agreed in principle.

The problem was that while CPA Australia saw positivity in the small business statement highlighting several measures, this Federal Budget focused start-up opportunities on its Industry Growth Fund, limiting the initiatives that would encourage more younger Aussies to start or buy a business.

CPA Australia found the Budget outlined some cost-of-living relief for Australian households, but it only included a small amount of energy cost relief for struggling small businesses.

“Fuel costs, power bills and various other inflationary pressures are having a hugely detrimental impact on many small businesses,” CPA Australia chief executive officer, Chris Freeland said. 

“Small businesses – most of which already have very thin margins – desperately needed a budget that would help alleviate the cost pressures they are facing on a daily basis,” Mr Freeland said.

“While the emphasis on relieving pressures on household finances was expected, a more business-centric budget would benefit all Australians as small businesses are significant contributors to the economy and job creation.”

Many small and medium sized businesses are also feeling overwhelmed by red tape at a time when they need to focus on running their business, not complying with new obligations.

Mr Freeland welcomed the one year extension to the instant asset write off for smaller businesses. However, a more permanent solution would provide the certainty business owners desire.

“While instant write-offs and subsidies for power bills are welcomed, the truth is small business needs more support, particularly those in energy-intensive sectors,” Mr Freeland said.

“The Budget confirmed investments in supporting businesses in distress and those facing mental health issues, but there is little in the way of additional funding for programs aimed at preventing businesses getting into trouble in the first place and enhancing business owners’ skills to help these businesses grow.”

Research from CPA Australia shows Australian small businesses trail behind most countries in the Asia-Pacific region when it comes to business innovation, use of new technology and are ultimately less likely to experience growth.

“Government support for initiatives like cyber-security will help Australian small businesses catch up to their regional counterparts,” Mr Freeland said. “The rebranded myGov will also bring greater security when interacting with government. These are all steps in the right direction.

“It’s positive that the government continues to talk up the need to build a more productive and dynamic economy. There are many policies essential to achieving those objectives that are in addition to the government’s industry and competition policies,” Mr Freeland said.

“Take for instance, the relatively low proportion of Australians under 40 owning their own business. Our annual small business survey shows that increasing the proportion of young Australians starting their own business or acquiring an existing business has a positive influence on business growth and productivity.

“The range of targeted small business support in this budget makes sense, but a more comprehensive look at the sector is needed.

“We look forward to the proposed National Small Business Strategy that will help business, community and government work together to nurture and grow our economy.”

Key Budget points made by the CPAs were:

• Investment incentives were made for select industries, but there was no shot in the arm for small business.
• Energy relief was welcome, but unlikely to make much impact for most small businesses.
• The Federal Government should incentivise more young business owners and greater innovation.
• Extra funding to help businesses in distress and mental health was a very necessary investment.

 

www.cpaaustralia.com.au

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