The Tasmanian government will fund a new small business incubation program in this year’s state budget, in a move welcomed by small business advocates.
The 2021-22 Tasmanain budget also prioritises support to the state’s tourism industry, with an extra $18 million in funding to support marketing for the local tourism sector.
The government is providing $1 million to support travel agents and has recently announced additional support for the state’s events industry. Meanwhile, the budget also provides for $8 million in support for the hospitality sector, including grants for operators outside of Hobart and Launceston, as it has been among the hardest hit by the pandemic.
The budget, which was handed down by Premier Peter Gutwein on Thursday, revealed a deficit of $690 million for the 2021-22 financial year. The state government is forecasting a return to surplus in 2023-24 and for the Tasmanian economy to grow by 4% this year.
Get daily business news.
The latest stories, funding information, and expert advice. Free to sign up.
There were few surprises in the budget, as much of the funding measures had been announced prior; however, Tasmanian Small Business Council chief executive Robert Mallett says small businesses are among the winners this year.
In his budget speech, Gutwein said $2 million will be spent on a new small business incubator and accelerator program, as part of a suite of measures to help ‘secure’ the future of the state’s small businesses.
Business Tasmania will receive $800,000 over four years to support businesses, while regional chambers of commerce will receive $300,000 over three years, and the Tasmanian Small Business Council will receive $150,000 to support their members.
The state government will also spend $1.2 million for small businesses to access specialist financial counselling for businesses affected by COVID-19, and an extra $25,000 will be spent per annum over four years to additional staff to be hired for an existing micro business loans program.
“We know COVID-19 has presented significant challenges for businesses across the world and we have not been immune in Tasmania,” said the Premier.
Mallett says the state’s 38,000 small businesses will also benefit from additional spending on building and infrastructure, and positive economic growth forecasts mean “small business has a lot to look forward to”.
“The announcements … set in concrete the promises made during the election period and should support Tasmanian small businesses economic growth and the mental health of their operators,” he said.
However, CPA Australia warned that Tasmania’s approach to locking out mainland residents during the lockdowns in other states and territories may have only provided short-term protection for the local economy.
“This approach has an expiry date,” said CPA Australia’s general manager of external affairs Jane Rennie.
“Once Australia reaches its vaccination targets, it will be important to reintegrate into the national economy or risk being left behind as other states’ economies take off.”
The Tasmanian government has elected not to include any new taxes or revenue raising measures in the budget and its “modest spending” is appropriate in the current economic climate, said Rennie.
However, she believes more could have been done in the budget to support small businesses to build capacity and invest in digital.
“The impact of lock outs on business has been softened by multiple rounds of business grants, travel vouchers and buy local campaigns,” said Rennie.
“What is needed now is to wean businesses of their dependence on government support, by building capacity, developing strategic skills and encouraging innovation.”
Other budget measures include a lowering of the land tax threshold; an expected $900 million investment in Tasmania’s health system; and more than $135 million to go towards skills and training.
The budget also provides for $4.6 billion in infrastructure spending over four years, however, only $600 million is new spending.