Analysis: Future focused government tries to help small business through painful present

A year after mentioning “small business” seven times in his second budget, Treasurer Jim Chalmers has tonight repeated the feat, though five of those mentions were simply flagging extensions to last year’s energy relief and instant asset write-off schemes.

That’s not to minimise essential, ongoing support for the under-pressure SME sector, including new investment to improve payment times, plus additional funding for mental health and debt helpline support for small business owners.

Delivering a $9.3 billion surplus – the first back-to-back surpluses in two decades – the Treasurer emphasised, much like last year, that the government’s main priority is cost of living relief. 

The budget features tax cuts for every taxpayer, but framed in what Chalmers described as “fraught and fragile global conditions” it is most notable – back-to-back surpluses aside – for Labor’s gigantic $22.7 billion bet on a (green) future Made in Straya.

The government is putting serious taxpayer monies towards supporting local industry and innovation, especially in the renewable energy space.

Chalmers described the move to net zero by 2050 as a “golden opportunity for Australia”, with exciting pathways for innovative startups and small businesses to help make the nation a green energy superpower, including the announcement of a new $1.7 billion Future Made In Australia Innovation Fund to develop new industries like green metals and low carbon fuels.

This fund complements previously announced programs such as the $2 billion Hydrogen Headstart scheme – designed to accelerate Australia’s green hydrogen industry – and the $1 billion Solar SunShot – aiming to rapidly increase the number of Aussie-made solar panels.

Handing down the 2024-25 budget, the Treasurer said “the number one priority of this government and this budget is helping Australians with the cost of living”.

Australian Bureau of Statistics (ABS) data has shown cutting energy bills for small businesses puts downward pressure on inflation, so as part of a suite of measures providing renewed help with energy bills for every household and many small businesses, the budget provides additional rebates of $325 to approximately one million businesses on small customer electricity plans from July 1.

Combined with similar relief for households, this measure is estimated to have helped reduce inflation by 0.75% over the past year. The 2023-24 instant asset write-off scheme has yet to be legislated but will provide additional counter-inflationary assistance over the next financial year if it passes the parliament, as expected, by June 30.

Technically the Prime Minister is the most powerful person in the land, but as gatekeeper of the nation’s finances, the Treasurer can make a strong counterclaim, particularly in May, when every competing interest in the nation is urgently knocking on the door of Canberra’s Janus.

Managing these demands to stimulate growth without stoking inflation is no easy task, with economic winds turning again and inflation sparking again just as the economy weakens. 

Given that, a second successive surplus, the first since the GFC, is not to be sniffed at, and provides substance to Labor’s ongoing efforts to be seen as responsible economic managers.

What does the budget mean for Australia’s small businesses?

Key measures include:

• $290 million in cash flow support for small businesses via a twelve-month extension of the $20,000 instant asset write-off scheme to June 30, 2025.
• Additional relief for small businesses through the Energy Bill Relief Fund, with rebates of $325 to around one million small businesses from July 1.
• $25.3 million over four years to improve payment times for small businesses, helping improve cash flow and boosting productivity.
• $23.3 million to support increased eInvoicing adaptation to disrupt scams.
• $20.5 million over four years to boost funding for the Fair Work Ombudsman and support small business employers complying with recent changes to workplace laws.
• $7.7 million for ongoing mental health support through the NewAccess for Small Business Owners program, so SMEs can access free, specialised help when required.
• $3.1 million for ongoing support available through the Small Business Debt Helpline.