Budget 2022: Small business groups respond favourably to tax and skills updates, but the “devil is in the detail”

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Australian Retailers Association (ARA) chief executive Paul Zahra. AAP/Dave Hunt.

Australia’s small business community has expressed early support for the tax tweaks, wage subsidies, and regulatory updates introduced by the 2022-2023 federal budget, without declaring the government’s plan a cure-all for challenges facing the sector.

In Tuesday’s budget papers, the federal government introduced a suite of reforms addressing today’s financial pressures, while encouraging SMEs to invest in skills and assets for the future.

Headline announcements include a multi-billion-dollar apprentice wage subsidy package, offering employers up to $15,000 to take on trainees in “priority” areas.

It was not the only measure designed with skills in mind. The budget features a new 20% “bonus” tax deduction on courses training employees in forward-looking digital skills; small businesses are also able to claim an extra 20% on the tech new tech assets.

The federal government also plans to reduce the Pay-As-You-Go (PAYG) tax “uplift” rate from 10% to 2%, a shift it said will improve small business cash flow through the financial year.

The documents also include a host of regulatory tweaks, including changes to company fees and the nation’s insolvency regime.

The Morrison government should be “highly commended” for cutting red tape, said Council of Small Business Organisations Australia (COSBOA) CEO Alexi Boyd.

Measures extending apprentice wage subsidies are also welcome, Boyd said.

“Often the first person to be let go in tough times is the apprentice — this program means small business people can afford to invest in an apprentice to help grow their business and invest in their training,” she said.

Similarly, COSBOA is “pleased” by the introduction of new tax leniency for tech upgrades and training. The industry group also welcomed the PAYG “uplift” update, declaring it a positive step for small businesses fearing a cash flow crunch in coming months.

But Boyd said the “the devil is in the detail,” urging Canberra to liaise with industry associations on how to best implement its budget vision.

The federal budget could have done more to tackle worker shortages, a factor Boyd called the “single biggest” issue currently facing Australian SMEs.

Renewed efforts to streamline the processing of skilled worker visas would have been appreciated, she added.

Retail groups expressed similarly warm sentiments, but maintained more could be done to assist the sector.

“While the budget provides much needed relief in the short-term, by the way of tax offsets and cash payments, strategic challenges remain for the medium to long-term which must be urgently addressed if we are to retain our social and economic resilience,” said Paul Zahra, CEO of the Australian Retailers Association.

Notably, Zahra said the retail sector would have appreciated further funding for climate adaptation and resilience, given the growing impact of natural disasters on Australian small businesses.

More could have been done for businesses recently impacted by flooding in northern New South Wales and southern Queensland, said Ben Kearney, CEO of the Australian Lottery and Newsagents Association.

“The small businesses that have been impacted by natural disasters, including this year’s flooding, have been met with dreadfully insufficient and slow financial assistance,” he said.


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Leanne Wyvill
Leanne Wyvill
1 month ago

Here’s a detail I’m interested in: “training courses delivered to employees in Australia or online, by providers registered in Australia.” Is the deduction only for training provided by Registered Training Organisations? I’m a registered business offering training but not an RTO.

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