Small businesses left underwhelmed by budget

The federal budget handed down by Treasurer Jim Chalmers on Tuesday evening has failed to address how to effectively revitalise the small business sector, according to the Council of Small Business Organisations Australia (COSBOA).

COSBOA said this year’s federal budget had “missed an opportunity to provide a long-term roadmap for small business growth.”

Luke Achterstraat, chief executive of COSBOA, said the budget had largely overlooked small businesses during the most challenging environment in living memory.

“With decade-high insolvencies and crippling energy, rent and input costs, this budget had the opportunity to provide a long-term roadmap for small business growth,” he said.

“Unfortunately, the budget largely recycles existing policies and fails to substantially deliver for the 2.5 million small businesses in Australia and the 5 million people they employ.”

Achterstraat noted the absence of the instant asset write-off (IAWO) threshold increase in the budget papers was a sign that the government needed to “put more meat on the bones” of the National Small Business Strategy.

CPA Australia echoed similar sentiments and said the government had failed to deliver initiatives that would have helped improve business productivity, innovation and growth.

The accounting body warned that small tax cuts would initially capture attention, but would provide little to no long-term relief or benefit.

Chris Freeland, chief executive of CPA Australia, said businesses and their advisers would find little in the federal budget that would help offset the pain small businesses had been experiencing.

“The budget lacks ambition and a thorough understanding of what businesses need. Not enough is being done to slash red tape or create the conditions and improve policy development that would shift the dial on Australian productivity and competitiveness,” he said.

“The IAWO is a prime example. It should have been made permanent, but it remains in limbo. Making it permanent would provide the certainty and opportunity businesses need to invest and grow. They cannot make serious long-term financial decisions when the rules could change every year.”

Despite overall disappointment in the budget outcome, small business advocates welcomed initiatives that would eventually trickle down to small businesses and provide slight relief, such as the $150 energy bill relief.

The Institute of Public Accountants (IPA) said the decline of small businesses was “a silent tax on Australia’s future.”

Based on Australia’s 2.6 million small businesses' significant contribution to GDP, the government should have looked to support small business innovation and nurture grassroots research and development.

Andrew Conway, chief executive of the IPA, said the energy bill relief and the delayed income tax changes would barely dent the additional costs small businesses had experienced over the years.

“Nearly half of our small businesses are operating at a loss, and the majority of self-employed owners are earning less than the average full-time wage. This is unsustainable,” Conway said.

“It’s not just about dollars and cents. It’s about the dreams and livelihoods of millions of Australians who run small businesses. Their success is Australia’s success.”