After more than a year of pandemic-induced disruption, treasurer Josh Frydenberg wanted his 2021 federal budget to serve as an indicator that Australia is back on the road to recovery. But is true economic recovery achievable in the short term, or is this simply a key weapon in the government’s upcoming election arsenal?
To help us undertake analysis of Budget 2021 and examine what it means for a post-COVID future, SmartCompany editor Eloise Keating sat down with three expert panellists — here’s what they took away from Budget 2021.
The $1.2 billion digital economy strategy
Tax cuts, business incentives and support packages for the most affected industries were top of the agenda for many viewers on Tuesday night, but key to future infrastructure and skills growth was the government’s digital economy strategy. This $1.2 billion plan will be “an important driver of employment, wages and productivity growth” to help secure Australia’s recovery.
For Alan Tse, CFO of Altina Drinks, two of the most exciting announcements were around e-invoicing and the expansion of the Australian Small Business Advisory Service’s digital solutions program, both of which will help small business owners adapt to the digital future.
“I take my hat off to all the business owners who have been operating in the last three decades when e-invoicing was not a thing, when cloud accounting software wasn’t a thing, and when people had to keep all the fiscal receipts in a shoebox and give it to their bookkeeper. I just can’t imagine how I would operate like that now,” Tse said.
“For a lot of small businesses who aren’t quite there yet with their digital literacy, the e-invoicing program is a really good opportunity to get a bit of support from the government to help them transition from paper to electronic.”
A missed opportunity
Despite the positives around tax cuts and programs to prop up struggling businesses, there were some glaring missed opportunities in Budget 2021 according to the analysis of Ilea Buffier, founder of Evalu8 Sustainability.
“I’m devastated to not see climate change in the top ten,” Buffier said. “I think that our government trying to pick winners and focus on specific sectors like hydrogen, carbon capture and utilisation of storage are all wonderful, but we really wanted something that incorporated all businesses to be able to participate.
“I don’t think that’s really captured in the budget at all. I think it was a missed opportunity to spend money to create a net-zero future.
“I’ve got a favourite quote that says, ‘the greatest threat to our planet is the belief that someone else will save it.’ And I think that this budget reinforces that: ‘it’s someone else’s problem. They can deal with it. Innovation will solve everything.’ That’s very disappointing.”
Learning from the mistakes of COVID
While the omission of any real investment in climate change and renewables was a negative for many viewers, others applauded the government for recognising where funding was needed in certain sectors — especially areas like aged care, childcare and mental health, which were heavily affected by the pandemic.
Frydenberg announced a $2.3 billion commitment to mental health care and suicide prevention; a four-year $119 billion record investment to overhaul aged-care services; and $1.7 billion towards childcare changes. According to Tse’s analysis, these huge investments in Budget 2021 are a positive signal for businesses as well.
“A lot of these spends actually indirectly help businesses [and create] good consumer confidence,” he said.
“A lot of money got spent on aged care, which is really good because we saw what happened when aged-care facilities weren’t well-funded — it had a huge drag on the economy and on consumers and families. So I think by spending money to really address aged care and childcare and mental health… there’s a lot of policies that will have an enabling effect on the economy and on businesses.
“Overall it’s a good budget that is quite positive for consumers and businesses.”
Peter Strong, CEO of the Council of Small Business Organisations Australia (COSBOA), agreed: “It’s a good budget right across the board. There’s always opportunities missed, but we can get a lot out of aged care, we can get a lot out of infrastructure, and we need to for the sake of the economy.”
At Reckon we are more than just accounting software, we aim to help small businesses build the foundation to grow and succeed – easy and affordable compliance is an essential part of this.