The 2013 Federal Budget handed down on May 14 by Treasurer Wayne Swan put Australia in an $18 billion deficit. Here, SME Association of Australia CEO Caroline Hong analyses what this budget holds for SMEs.
From Australia’s SME business community it has bought a range of responses – business owners are left wondering whether they are winners or losers and if the whole thing is comedy or tragedy. This Federal Budget has even gone as far as being labelled, ‘The Toothless Budget'. The SME Association of Australia acknowledges that it’s important to have the NDIS and education matters in order, but the challenge is how do we to fund these?
Business communities see this budget as bad news. What applies to big companies – for example, in the form of bringing forward the PAYG tax instalment to a monthly payment instead of quarterly – is an administrative nightmare and cashflow problem. So what is to stop big businesses from passing on the burden by delaying payments to business suppliers in the SME sector and potentially causing a multiplier effect to the viability of businesses in the SME sector that are dependent on the bigger companies’ viability.
Research and Development changes mean that the incentives are not for the big companies only. Businesses that are not cash positive yet and with less than $20 million in turnover may benefit by having the refundable tax offset made as a quarterly payment, if they meet all compliance requirements.
Changes in the Enterprise Connect and Enterprise Solutions program could mean an extra $20,000 in some cases for businesses that succeed in gaining the grant funding from government. Businesses can also look forward to the GOLD (Growth Opportunities Leadership Program), a new executive training program aimed at building the next generation of leaders into future industry employers. Government will provide assistance in growing businesses’ capabilities to meet standards for supply required by government.
So, is that all for SMEs in this Federal Budget?
The complexity of staying in business and the ongoing administrative burden is making it hard to keep business costs down. Red tape is still a seriously sore point for SME business owners. Revenue arising from the business activities of SMEs contributes enormously to the revenue for this government – for any government, for that matter. SMEs are resilient and enterprising, and they want to remain competitive and productive. They want to grow, prosper, and contribute to jobs, innovation and global solutions. The key drivers for the economy and prosperity of our nation lie within the SME community.
So, bottom line – will the Federal Budget make life easier for Australia’s many, many SME business owners? To use an apt metaphor, SMEs are the hands that feed the government. SMEs contribute enormously to the country's revenue, job creation, innovation, growth, well-being, and the prosperity of the nation.
Through this budget the Federal Government should be supporting SMEs by giving them an easier, less complex business platform by which they can operate to remain competitive. Our government should be helping, enabling and supporting our SMEs to succeed commercially on a global stage. But unfortunately in this budget there is little evidence that the government will do so.
To continue the metaphor, if SMEs are the hands that feed the government, the government shouldn’t bite the hands that feed it. SMEs cannot – and will not – remain silent for long if they keep getting bitten.
My Business is the official publication of the SME Association of Australia.
Follow @mybusinessau on Twitter for breaking stories throughout the day.
Find out why you should join the SME Association of Australia.