Treasurer Scott Morrison’s 2017 budget looks set to focus on housing and education, but small business owners have not given up on the principles of the “innovation agenda” and are calling for education and better resources to prepare Aussie businesses for growth.
SmartCompany has surveyed SME owners and operators on their top priorities for 2017, and aside from a push for an extension of the $20,000 instant asset tax write-off and the pursuit of future tax cuts for smaller entities, business owners say they’d prefer to see action on training, investment and education of entrepreneurs before things like personal income tax cuts and a lowering of the corporate tax rate for bigger businesses.
“Promoting job creation” is more important to SMEs than cutting taxes or returning the budget to surplus, and several SmartCompany readers observed they’d rather the government extend skills and training to new groups of entrepreneurs, and bring in policies to address the specific stresses of running a business.
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“Australia also does not have a culture to support micro loans for start-up businesses for marginalised groups,” one business owner told SmartCompany when discussing their top budget priorities. Observing the government should only act on policies that actually create jobs, they spoke of the importance of extending schemes to empower more entrepreneurs to start businesses.
“Particularly job creation for mature workers, semi retirees, older women and Aboriginal and Torres Strait Islanders,” they said.
Other respondents to SmartCompany‘s pre-budget survey earmarked “job creation for older Australians” as a key priority, pointing to their businesses as key drivers of employment within their capital cities.
Business owners also indicated support for funding for apprenticeships, traineeships and further investments in STEM education, with another business owner saying policies should encourage locally trained talent to stay working in the country.
“Waive HECS for teachers and STEM students if they agree to work in Australia for 5 years,” they suggested.
However, all signs point to a tightening of higher education loan debt repayment across the board in Tuesday’s budget papers, with the government already announcing plans for a lower threshold for earnings before repayments commence, and increase to university fees.
While all eyes are on the future of the $20,000 instant asset write-off policy, and whether it will be extended beyond June 30, business owners also remain sceptical about the value of cutting the corporate tax rate for mid size and larger firms. In April the government successfully lowered the corporate tax rate to 27.5% for businesses turning over $10 million or less each year.
While the government has promised to keep tax cuts for larger businesses on the table, not all support the move.
When asked what they didn’t want to see in Tuesday’s blueprint, several businesses told SmartCompany they’d prefer not to see “major company tax cuts” at this stage.
“[I don’t want to see] a reduction in company tax [rates] for companies with turn over greater that $50 m,” said one business owner.
Meanwhile, grants for education and training that were promised at the launch of the government’s innovation agenda are still being rolled out, despite concerns from some parts of the startup community that the government’s commitment to innovation has fallen to one side.
Recent projects include the announcement of promised funding for Australian high schools to run multidisciplinary projects to boost digital literacy, and the opening of applications for a Global Bridging Grants program for SMEs to work with international partners to develop market-ready products.
What to watch
As the final countdown approaches for this year’s federal budget, expectations are firming up around what will be included and Treasurer Scott Morrison has himself given some clues.
Here are three policy areas expected to get attention in Tuesday’s budget papers:
Housing: salary sacrifice on the cards?
The government has pledged to address the “crisis” of housing affordability across the nation, although changes to negative gearing policies have been ruled out. Instead it’s expected the Treasurer will outline measures to give first home buyers a foot-up into the property market, through a salary-sacrifice style savings model to speed up saving for a housing deposit.
Incentives for older Australians to downsize from their family homes into smaller dwellings are also on the cards, while the controversial suggestion to let young people dip into their super looks to have been ditched.
Banking sector in spotlight
The behaviour of the banks has been front and centre over the past years, as the community has taken aim at the sector’s dispute resolution policies, as well as the clarity of communications with both individuals and businesses.
Two policy frameworks have been predicted for Tuesday night.
The first is a reworking of the current regulatory bodies for financial services, into one “super” regulator to take over from the Financial Services Ombudsman. Meanwhile, measures to improve competition in the banking sector are also expected, including a Productivity Commission report into the sector.
Energy supplement for pensioners
The Treasurer has also announced plans for a one-off payment for those on the aged and disability support pensions of $75 dollars to help them deal with rising energy costs.
The Australian reports this comes off the back of a deal done with Senator Nick Xenophon to secure the passage of corporate tax cuts through the Senate in April.
Read more on about what Australian entrepreneurs are calling for in Budget 2017 here.