There’s plenty for SMEs to be happy about in the 2022 budget, even if there is a lack of action on labour shortages, skills gaps and the instant asset write-off scheme.
In a recent SmartCompany webinar, editor Eloise Keating spoke with Alexi Boyd, CEO, COSBOA; Helen Lea, chief employee experience officer, MYOB; and Alan Tse, co-founder and commercial director, Altina Drinks to get their thoughts on this year’s budget —and what it means for SMEs.
How does this budget score out of 10?
This budget scored highly across the board, with COSBOA chief Alexi Boyd and MYOB’s Helen Lea giving it an 8.5 out of ten rating. Altina Drinks founder Alan Tse gave it an eight out of ten for its inaction on important issues like climate change and skilled migration.
“There wasn’t much about climate change and obviously climate change is about future-looking policies that will help all businesses,” said Tse.
What will the election mean to you?
Sign up to our free newsletter, including this weekend’s coverage of the election.
Lack of migration policy “a huge letdown”
There was a distinct lack of migration policies for both low and highly-skilled workers, the panel observed, without a clear-cut solution to Australia’s looming labour shortage crisis.
“Migration is a huge piece and a backbone to help businesses of all size to increase. The lack of what they’re going to do about migration policies was a huge letdown,” Tse said.
“As an SME in Canberra, I’m struggling to even hire casuals. [We need] overseas students that want to come to Australia to study and make a living through casual work.
“I talk to bottle shops and restaurants, and they say ‘we can’t open seven days a week because we don’t even have enough staff’. That has a huge impact on the whole supply chain.”
Tax breaks for SMEs drive digital uptake
A welcome surprise in this year’s budget were tax breaks for SMEs looking to invest in training and tech investments.
The technology investment boost will provide businesses with a $120 tax deduction for every $100 spent on digital transformation. Businesses can make investments in cloud computing, invoicing, cybersecurity and more, and claim a deduction of up to $100,000 a year.
“We’ve been advocating for these measures now for two years. We were delighted to see them come through,” says Lea.
The tax cut applies for businesses with less than $50M annual revenue and is available immediately, running for the next 15 months through to June 2023.
SMEs are also eligible for a 20% tax incentive for skills training programs that will run from now until mid-2024.
“It’s an opportunity to build digital fluency with your employees at the same time as you’re making these digital investments,” Lea observed.
“You can upskill staff, boost their capability and confidence as you introduce new digital tools and maximise opportunities for digitisation.”
No word on the instant asset write-off scheme
The previously much-loved instant asset write-off is another casualty of this budget, with the government failing to extend the temporary write-off terms put in place during the pandemic.
COSBOA was hopeful for a three-year extension with an annual review of the scheme, but that wasn’t delivered this year.
With the scheme set to run out in 12 months, SMEs may be at the mercy of pandemic-related supply chain issues worldwide.
“What we’re hearing from our members, particularly with large pieces of equipment, is that the ‘supply chain effect’ on investment into capital is really problematic,” Alexi explains.
“Take an example of a $360,000 truck, which has been ordered now and will be delivered at least 12 months away. The difference to the customer could potentially be $120,000 in company tax, depending on what month it’s delivered in.”
Lea adds that business balance sheets are strong and businesses “clearly have an intention to invest” — but all that could be stymied if the scheme runs out too soon.
“They’re holding onto cash and certainty unlocks that kind of investment.”
MYOB is a leading business platform with a core purpose of helping more businesses in Australia and New Zealand start, survive and succeed. At the heart of MYOB is a customer base of 1.2 million businesses and a network of more than 40,000 accountants, bookkeepers and consultants, for whom MYOB delivers end-to-end business and accounting solutions. MYOB operates across four key segments: Small and Medium Enterprises (SME), Enterprise, Financial Services and Practice.