Last year’s federal budget made many promises to the small business sector, including tax breaks for energy-efficient upgrades, millions of dollars in funding for a cybersecurity advisory service, and the fast-tracking of complaints with the consumer watchdog.
But how did the pledges stack up, and did the somewhat surprising 2023-2024 federal budget deliver for SMEs and startups?
Here’s how some of the headline commitments performed, two weeks before the federal government unveils its 2024-2025 economic roadmap.
The federal government promised $325 in energy bill relief to eligible small businesses, with the intention of shielding them against sharp price hikes.
Combined with state and territory co-contributions, some small businesses found themselves eligible for $650 in rebates.
The program, which also covered households, came at a cost of $1.5 billion, matched by the states and territories.
Some signs indicate small businesses could receive further energy bill support in the 2024-2025 budget.
“Helping Australian families and small family businesses with their energy bills was a key priority in last year’s budget,” Prime Minister Anthony Albanese told the annual COSBOA summit early this month.
“And as we put together next month’s budget, small businesses and families will again be front and centre in our thinking.”
To encourage small businesses to file their outstanding income tax returns, fringe benefits tax returns, and business activity statements, the 2023/2024 budget promised to remit some late payment penalties.
Before the amnesty wrapped up in December last year, more than 14,000 small businesses took advantage of the scheme, resulting in more than $48 million in remitted penalties.
Cyber Wardens, the COSBOA-led cyber security training platform, is up and running.
After the last budget pledged $23.4 million to the scheme over three years, the Cyber Wardens short course is free to use for small businesses hoping to bolster their digital defences.
The operation is also producing reports on the state of cybersecurity capability among small businesses, as mounting evidence shows they are particularly susceptible to online fraud and costly scams.
The last federal budget committed $392.4 million towards the Industry Growth Program, comprised of an advisory service assisting SME applicants to commercialise their ideas, and grants to help those businesses grow.
SMEs that receive advice through the program are free to apply for up to $5 million in matched grant funding to put those lessons into practice.
The advisory service launched in November last year, formally opening the Industry Growth Program to applicants.
While the scheme is open, the Department of Industry, Science and Resources is yet to share the details of any grant funding recipients.
In the last budget, Labor committed to establishing a new ‘super complaints’ function within the Australian Competition and Consumer Commission (ACCC), allowing everyday Australians and small businesses to fast-track their complaints to the consumer watchdog.
Legislation underpinning the new ACCC system passed through Parliament in March, and Treasury is considering how to best implement the scheme, which will see trusted advocacy groups champion the cause of small business.
There’s been a name change — it’s now the designated complaints function, not the ‘super complaints’ scheme — but the system itself is well underway.
The Small Business Energy Inventive is a tax scheme offering eligible small businesses a bonus 20% tax deduction on investments making their operations more energy efficient.
It applies to expenditures made between July 1, 2023 and June 30, 2024, with the federal government forecasting costs of $314 million over forward estimates.
However, at time of writing, legislation underpinning the tax boost is yet to come into law.
With precious few weeks until the turn of the financial year, lawmakers will have to hurry to avoid a situation like last year, where the similarly structured technology and training boosts only received legislative backing days before the turn of the financial year.
Since the true uptake of the scheme will only become clear when businesses file their tax returns, it is yet to be seen if SMEs will indeed extract $314 million of tax benefits from the scheme.
The federal government’s plan to institute a $20,000 instant asset write-off for eligible business expenses was recently passed in the Senate, where lawmakers sided with Liberal-led amendments to expand it to $30,000 for the 2023-2024 financial year.
The Senate also voted to expand its eligibility criteria, allowing a greater number of businesses to claim instant write-offs.
The bill — the same one that would underpin the Small Business Energy Incentive — is still before the Senate but will return to the lower house for final approval.
The 2023-2024 budget promised $18.1 million over four years to improve the government’s procurement practices for businesses.
That included “increasing engagement with small-to-medium enterprises to promote awareness of opportunities to sell to the Australian Government”.
Yet some business groups argue more could be done in the upcoming budget.
“It is critical that barriers to small business access to Commonwealth contracts be removed with an emphasis on greater awareness, easier application processes and reduced red tape,” said Luke Achterstraat, CEO of the Council of Small Business Organisations Australia, in its pre-budget submission.
Separately, in March last year, Finance Minister Katy Gallagher recruited Australian Small Business and Family Enterprise Ombudsman Bruce Billson to investigate if reforms enacted in 2022 are actually making it easier for small businesses to access those contracts.
That review was provided to the government in December, but it has not been publicly tabled, nor has Minister Gallagher penned a formal response.
That said, Minister Gallagher did claim in March that the government hoped to turn its spending power to small businesses.
At least one other lawmaker agrees more should be done to assist small businesses vying for government contracts.
“We have government-wide procurement targets for Australian SMEs in our Commonwealth Procurement Rules,” Independent Senator David Pocock wrote in December.
“But we don’t have a process in place to guarantee that the public servants making the procurement decisions actually know whether or not they are dealing with an Australian SME when inviting a company to bid on — or when awarding — a government contract.”
Not every promise made in last year’s budget was scheduled to start by July 1, 2024.
Notably, it promised:
The delivery of those measures is still up for assessment.
To see SmartCompany‘s full budget coverage, click here.
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Senior Business Journalist
Focused on the small business sector, David’s work covers the political, regulatory, and economic issues facing Australian entrepreneurs. Prior to joining SmartCompany, he was a reporter for Business Insider Australia. You can follow him on LinkedIn.
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