In the lead up to this year’s federal budget, we consistently heard two key themes in our conversations with small business owners and startup founders, and the groups that represent them.
The first theme was skills, and the second theme was digital.
In many ways those two themes go hand-in-hand in the modern economy, and tonight’s unashamedly pre-election budget delivers a number of noteworthy ideas on both fronts.
A complete revamp of Australia’s apprenticeship system is one of the big-ticket items and, as Peter Strong has been writing for SmartCompany, Australia’s training system has been in dire need of attention.
Whether the Morrison government’s proposed solution will bring about meaningful change will become clearer after we go to the polls in May.
However, two other budget measures to encourage employers to invest in the skills of their existing employees, and in digital assets to transform their businesses, will kick in before then.
The Skills and Training Boost will allow SMEs with annual turnover up to $50 million to access a bonus 20% deduction on the cost of external training courses for their employees.
Similarly, the Technology Investment Boost will also offer the same businesses a 20% deduction on investments they make to go digital, to the tune of $100,000 in spending each year.
Such assets could include a new online sales platform or cyber security upgrades, for example.
Importantly, both measures will take effect from budget night.
As recent research from CPA Australia showed, Australia’s small businesses are lagging behind their counterparts in the Asia Pacific when it comes to embracing digital systems, and governments do have a role to play in changing this.
This year’s budget also includes increased funding for the Australian Small Business and Family Enterprise Ombudsman; the creation of a new small business unit within the Fair Work Commission; and, as we know from pre-budget announcements, proposed changes to the Pay-As-You-Go tax system. There’s continued reforms proposed for the insolvency system and a series of measures to streamline regulation for small businesses.
Taken together, it’s an even-handed, sensible approach. But it’s also true that this budget contains lost opportunities.
The government says it wants to make the paid parental leave system “fairer” for Australian families, but overall the number of weeks’ leave available won’t change. The opportunity to fundamentally rethink the childcare system, thereby truly getting more women into the workforce, was not taken up.
For years now, the Coalition government has continued to offer temporary extensions to the instant asset write-off scheme first introduced in the 2015 budget, but has shied away from making the measure permanent. This budget continues that pattern.
Members of the tech industry were also hoping to see improvements to the Research & Development Tax Incentive, but it was noticeably absent from the budget papers.
This is an election budget if there ever was one; the temporary cost-of-living measures show exactly that. And so the government had an opportunity to show its vision for the small business of the future.
In his budget speech, Treasurer Josh Frydenberg claims the budget will be $100 billion better off by the end of the forward estimates, compared to last year.
The problem is, most Australian small businesses don’t feel better off, and may struggle to see within tonight’s plan how they will get there.
And that’s the biggest missed opportunity of them all.
Editor
Eloise is an experienced business journalist and editor, who has held senior editorial roles at SmartCompany since 2014. Prior to joining SmartCompany, Eloise was news editor at Books+Publishing, the trade press for the Australian book industry. Eloise has degrees in media and communications, marketing and business management, and political science. You can follow her on LinkedIn, and Twitter at @ellykeating.
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