The budget contains some good news for small business, but reaction from the business community is far from universally positive.
Last night’s federal budget has not enthused the small business sector.
Craig Griffiths, owner of Askfindbuy, felt “... it was not as bad as it could have been” but felt “many things were renamed and added together to get a new pool of funding.”
“From a business growth point of view, it doesn't hurt. It may restrain interest rates which is a bonus.”
The Australian Retailers Association declared its members have been “ripped off” by the budget.
CEO Russell Zimmerman says “The immediate write-off of the first $5,000 on the purchase of any motor vehicle is good news for retailers but incentives for investment in other areas of business would have received a greater welcome. Moreover, businesses won’t be able to claim the write-off until the 2013/2014 financial year but retailers need some relief now.”
He went on to say the budget contains nothing “... that gives incentive for retailers to invest in the training or the infrastructure they need to provide best practice online service to Australian customers.”
The Commonwealth Bank is more upbeat, with Economist James McIntyre offering commentary to the effect that “The extension of the asset write-off to motor vehicles is supportive of investment, particularly for small businesses seeking to upgrade their vehicles in order to adapt to rising petrol prices.”
“The early cut to the company tax rate for small businesses which has been announced is also a big boost to investment, jobs and cash flow. Additionally, the sector has benefited from a cash flow measure that the Government announced through a change to Pay As You Go tax instalments. This will deliver an extra $700 million into cash flow for small businesses which will again help them to deal with some of the pressures the sector is facing.”
The NSW Business Chamber says the budget is “neither tough nor visionary”. CEO Stephen Cartwright says “The real challenges of seeking greater efficiency from within government, improving national competitiveness, investing the proceeds of the resources boom and securing the nation’s long term financial future have been left for another day.”
Cartwright applauded the new vehicle write-offs and changes to PAYG tax arrangements, but took issue with some of the new training program, saying “we do have grave concerns about the decision to redirect training incentives from occupations perceived to be of ‘low economic value’.”
The Australian Industry Group's budget response, from CEO Heather Ridout, says “more could have been done to offset the risks to the economy due to the impact of the strong dollar on sectors such as manufacturing, tourism and education, which are on the wrong side of the resource boom.”
The Minerals Council of Australia welcomed the labour force elements of the budget, but added that “This Budget was an opportunity to outline a strong productivity agenda in areas like project approvals, infrastructure and regulatory reform and to signal the critical importance of flexible labour market arrangements to securing the gains from future mining investment. There remains much to be done on this front.”
Our favourite response, to date, comes from Local Cafe owner Pete, who when we asked him for a thought about the budget this morning replied: “I haven’t read it yet but I have made 400 coffees this morning.”
A more sober response came from consultancy PwC, whose Private Clients partner Jason Daniels says, “The Government’s plan to skill more Australians from school leavers and apprentices to older workers and attract skilled people from overseas will increase the talent pool for private businesses particularly those in regional areas.”
But Daniels also warns that "private businesses are still not on equal footing with their cousins, big business, so will need to be flexible and creative about the way they attract skilled workers from the newly expanded talent pool.”