Treasurer Scott Morrison has “assured” support for small business in today’s federal budget, amid expectations the $20,000 instant asset tax write-off scheme will be extended.
Speaking to The Australian, Morrison acknowledged the positive response to the scheme, which is expected to be extended a further 12 months. Currently, it is due to expire on June 30.
“Small business can be assured that they’ll continue to have our support,” Morrison said, adding that he believes Australians “instinctively” associate support for small business with better conditions for workers and the economy.
Small business owners have previously told SmartCompany the instant asset write-off is a high priority when it comes to their budget wish list, and Council of Small Business Australia chief executive Peter Strong told SmartCompany he would be “very surprised” if the scheme was not extended.
Strong believes the scheme is an example of a “practical” policy for SMEs, which shadow small business Minister Katy Gallagher believes the government needs more of in order to “directly benefit” the small business community.
In a statement released this morning, Gallagher criticised the government’s 10-year plan to slash the company tax rate to 25% for companies with more than $50 million in revenue. The government secured Senate support for the first part of the plan in March, securing a 25% tax rate for businesses with $50 million or less in turnover by 2027.
The entire plan is estimated to cost nearly $50 billion over 10 years, which Gallagher argues will “do little” to benefit Australian SMEs.
“It’s clear that a $50 billion big business tax cut will do little to boost the numbers of customers walking through the doors of small and medium businesses or grow confidence in the broader economy,” Gallagher said.
“It is imperative that this budget contains a focus on projects that will directly benefit small and medium businesses to grow and in turn, create more jobs rather than the shallow and short sighted idea to hand out large-scale tax cuts to Australia’s most profitable companies.”
Gallagher implored the government to focus on practical policies for SMEs, rather than “handouts to businesses that don’t need them”.
However, Strong believes Labor’s focus should be elsewhere, saying the party should look to drive changes in workplace relations in order to “make things simpler” for small businesses.
“If you have a simplified awards system it will make things easier for SMEs and cause a lot fewer problems and disputes for the regulator,” Strong says.
Along with the continued focus and support from the Australian Small Business and Family Enterprise Ombudsman Kate Carnell, Strong says he would “love” to see Labor get behind measures to improve payment times for small businesses, which he hopes to see covered in today’s budget.
“I’m not sure if it fits in the budget, but I’d like to see them bring on earlier payments from the government to small businesses, down from 30 days to 10,” he says.
“Small business people live on confidence, so this would set a precedent and send a good message.”
Shadow Treasurer Chris Bowen called out the government for failing to live up to its promise of an “innovation agenda”, telling a Sydney fintech event “innovation isn’t just about new apps”. He said the focus should be on all innovative businesses around Australia, including manufacturing and service-based businesses.
“[We need] an innovation effort made up of people of all backgrounds, all regions — and sharing the economic uplift instead of dividing a small number of winners extracting their gains from the many who think they’ve been exploited in the process,” he said.
“It’s not just about ‘accelerators’ and ‘entrepreneurs’.”