Small business groups are hailing Budget 2018 a win, but Scott Morrison’s speech last night will certainly not be one SMEs are keen to watch on replay.
When asked for reactions on last night’s policy vision, “boring” was a common adjective from those in the small business community.
“Maybe budgets are supposed to be boring — and I say that in the nicest possible way,” Australian Small Business and Family Enterprise Ombudsman Kate Carnell tells SmartCompany.
“My favourite bit of the whole budget was that it was boring. In my experience, boring means good,” Council of Small Business of Australia chief executive Peter Strong agrees.
Overall, the consensus seems to be the government hasn’t done anything to hinder Aussie SMEs, but its rhetoric around supporting innovation and growth doesn’t really stack up given what’s on the table.
Carnell says smaller operators have seen some wins, but “that said, there’s not a lot there”.
So what, of the little that was there, piqued the interest of entrepreneurs and small businesses? Here’s a wrap-up.
$20,000 instant asset write-off extension welcome — but could go further
Strong says the decision to keep the $20,000 instant asset write-off scheme is obviously good news, but it’s not surprising the commitment is for only one more year.
“We keep saying it should be indexed [to CPI], if they’re going to do it every year,” he says.
Carnell says everyone agreed they wanted the policy to stay in place, so it was good news it is being given an extra lease on life.
She believes SMEs should also feel good about the government’s continued commitment to addressing cash lost through the black economy.
“A couple of things we think are good in particular are the focus on phoenixing, because it really is a shocker for small businesses when people do it, and the black economy taskforce focus,” Carnell says.
R&D causes some worries
“If we have one issue with this budget it is that we are concerned that the government’s decision to cap the R&D tax incentive will cap creativity and innovation,” chief executive of MYOB Tim Reed said in a statement this morning.
A number of small businesses and startups have echoed these concerns, observing the changes could hurt those who deliberately outlay big R&D expenditure each year with the specific goal of disrupting their industries.
Chief executive of ONTHEGO Sports Mick Spencer says his company spends more than one fifth of its top-line revenue on research each year and the caps on cash refunds suggested in last night’s budget could be “cause for concern” not just for his business, but many others.
“With the government making it harder for businesses to access the R&D tax break, this will make it harder for disruptors to continue to innovate,” he says.
The missed opportunities
Carnell says that while she appreciates it’s a challenging area at a federal level, she would have liked to see the government promise to address power price increases.
“As we’ve said, this is a missed opportunity. It’s a hard one for the federal government as it’s a state issue. That said, it’s going to be important for them to keep downward pressure on energy providers going forward.”
Funding for training was also a big area that small business groups were calling for in the lead-up to Tuesday. Strong says that while there was some mention of training, including a new outline of how the Skilling Australians fund will be used to fund apprenticeships, there’s no coherent strategy in place.
“We need to see a more strategic approach, that’s the problem — and we’re going to be pushing for a better alignment between employment services and training into the future,” he says.