It’s hardly surprising the words “small business” appear just once in Treasurer Wayne Swan’s budget speech.
While the Budget papers describe Australia’s 2.4 million small businesses as the “backbone” of the economy, there is precious little that is new in the Federal Budget for small business and what measures there are will not come into effect for at least two more years.
In fact, Swan’s big-ticket items for small business are actually old news. The decision to fast-track a cut in the company tax rate from 30% to 28% for businesses with revenue under $2 million was announced last week as part of the Government’s response to the Henry Tax Review, as was the immediate tax write-off for assets under $5,000.
But both measures will not come into effect until July 1, 2012. It’s hardly the immediate boost entrepreneurs might have been hoping for.
Get daily business news.
The latest stories, funding information, and expert advice. Free to sign up.
Of course, entrepreneurs shouldn’t feel left out at not having received any big-ticket Budget largesse – this is a Budget short on the big picture and tightly focused on small, targeted initiatives.
Thankfully, there are a few that will help small and medium business owners.
The move towards simplifying the rules around how listed companies can issue bonds to retail investors should help small and mid-cap companies who have found their access to back finance greatly reduced since the onset of the GFC.
Cuts to GST compliance costs are also welcome, although these are mainly technical measures that will have a limited impact.
Funding for the long-awaited move towards a national system of business registrations is also welcome, particularly if it manages to make good on the Government’s claim of $1.5 billion in savings over eight years.
And the recreational boat industry will no doubt be rejoicing over a change in GST legislation that will make it more attractive to sell boats for exports – although exactly how this slightly bizarre change made it onto the Government’s Budget agenda will no doubt be the subject of some head-scratching in industry association offices over the coming days.
But these are all really quite minor issues. If you are looking for some real vision from this Government in terms of small business policy, you will be disappointed.
There was nothing about increased funding for innovation, nothing about a pathway towards simplification of business tax returns, nothing about encouraging exporters. And certainly nothing about the perennial entrepreneurs’ curse, payroll tax.
Perhaps the best big-ticket announcement for small business was the announcement of $660 million in new funding for skills and education, including 39,000 new training places in high-demand sectors and 22,500 new apprenticeships.
The Government’s forecasts suggest Australia is heading back towards full employment at a rate of knots, so every dollar that we can pump into skills is money well spent.
The Government also deserves a pat on the back for steering the economy back towards a Budget surplus in just two years time, in 2012-13.
Achieving this three years ahead of schedule is a testament to the strength of the Australian economy in the last 18 months and will give the Government a strong platform for re-election later this year. Swan and Kevin Rudd’s credentials as solid, cautious and conservative economic managers have received a huge boost with this Budget.
But whether that’s enough for the Government to get entrepreneurs on side remains to be seen.
It’s hard for an entrepreneur battling in what remains a very patchy economic environment to get overly excited about an abstract idea like a Federal Budget surplus – particularly when you are effectively being told that any type of real assistance or support is more than two years away.