The Australian Small Business and Family Enterprise Ombudsman Kate Carnell says the Federal Government’s 2020 Budget is one for the history books, with a record spend that will help lift small businesses out of the COVID crisis and provide a much-needed boost to economic confidence.

The Budget includes a number of new, extended and existing measures to further support small business including:

• $4.3 million for Beyond Blue’s NewAccess service, providing mental health support for small businesses
• $1.2 billion on the extension of wage subsidies for apprentices and trainees
• $850 million on JobMaker hiring credit payable for up to 12 months to employers who hire young people (aged 16-35 years)
• $15 billion in JobKeeper payments
• $1.9 billion for loss carry back tax provision
• $26.7 billion in instant asset write-offs for business - uncapped
• $800 million national digitisation plan

“Tonight’s budget represents the biggest-ever fiscal response to an economic downturn in Australian history,” Ms Carnell says.

“While this is entirely appropriate given we are in the midst of the worst conditions we have seen since the Great Depression, this does come with a record high deficit of $213 billion, and that is projected to balloon to $966 billion in 2024.

“Given the number of measures that target the small business sector in this Budget, the Federal Government has clearly acknowledged the role small and family businesses have to play in the nation’s economic recovery.”

Victorian Chamber of Commerce and Industry Chief Executive Paul Guerra said several measures are closely aligned with the Victorian Chamber’s advocacy.

“The Victorian Chamber highlighted three key objectives that we wanted to see in the Budget: protecting and growing local business, cementing and improving our global reputation and the next big infrastructure build. We are pleased the Government has taken up our recommendations,” Mr Guerra said.

“This historic budget will create jobs, stimulate sectors such as manufacturing, tourism, renewable energy and technology while investing in rail and roads to improve our liveability.”

“It’s great to see significant investment in regional Victoria as our tourism areas in particular recover from a horror year of drought, bushfires and COVID-19 restrictions which have effectively cut them off from the metropolitan Melbourne visitation dollar, as well as interstate and overseas markets.”

“The strong focus on encouraging a business-led recovery in the Federal Budget must be mirrored in next month’s State Budget, which provides a timely opportunity to lower business costs, cut red tape, encourage investment and innovation and generate jobs.”

Image: VCCI Chief Executive Paul Guerra. Source: VCCI

NewAccess

Ms Carnell welcomed the Federal Government’s $4.3 million commitment to Beyond Blue’s NewAccess for Small Business service, which will provide small business owners with free one-on-one telehealth sessions with trained mental health coaches from early next year.

“Mental health is proving to be the next big challenge to emerge from the COVID crisis and it’s particularly impacting the small business community,” Ms Carnell says.

“There has never been a tougher time to be in business. Small business owners are struggling to stay afloat and keep their staff employed throughout this difficult period.

“Small business loans are often secured against the family home, so if they lose their business they can lose their home. It means the stakes are incredibly high and that is understandably taking a huge toll on small business owners’ mental health.

“Beyond Blue’s NewAccess service offers evidence-based, personal advice on strategies for managing stress.

“Crucially, it’s provided by specially trained coaches that have experience in small business. Being able to talk to someone who understands the mental load of running a small business will make a real difference.

“My office will be working in partnership with Beyond Blue to promote NewAccess and connect small business owners with the service via our call centre and assistance team. It will also be fully integrated into our My Business Health web portal.”

JobTrainer

A further $1.2 billion will be spent on extending the JobTrainer package, supporting SMEs employing apprentices and trainees with a 50% wage subsidy, up to $7,000 per quarter, for 12 months.

“This is an excellent initiative that responds to the needs of SMEs as they work to come out the other side of this crisis,” Ms Carnell says.

“It incentivises SMEs to take on new staff and helps with labour costs, particularly for young people who are doing a lot of on-the-job learning in the first year.”

Loss Carry Back

“This is a tax initiative that will result in tangible benefits for small businesses that would have otherwise been profitable if not for harsh trading restrictions and lockdowns,” Ms Carnell says.

“It effectively allows a small business that has paid tax on profits in or after 2019 to claim back losses incurred from full year 2020 to June 2022.”

R&D incentives

“Its good to see that small businesses will have a tax offset set at 18.5% above their company tax rate and the $4 million cap on annual cash refunds will not proceed,” Ms Carnell says.

“However, I am concerned the government has failed to clarify the position on software R&D. Small business undertaking innovative work in the software space desperately need certainty around eligibility from government.”

National Digitisation Plan

The Federal Government has pledged $800 million in this year’s budget to help businesses take advantage of digital technology.

“Over $400 million will be allocated to create a national directory, to be administered by the ATO,” Ms Carnell says.

“From a small business perspective, it means you can register for an ABN, ACN or licence in just one place – significantly cutting red tape.

“We know the pandemic has already forced many small businesses to make a decade of changes in just a few months by changing the way they do business, so it’s encouraging the government is supporting small businesses to modernise with technology.”

Instant Asset Write-off

“In possibly the biggest win to come from this year’s budget, small businesses can now write-off the full value of assets purchased until 2022,” Ms Carnell says.

“This gives small businesses time and certainty to plan to buy major equipment.

“It also significantly reduces the need for depreciation and cuts red tape.”

Image: Australian Small Business and Family Enterprise Ombudsman Kate Carnell. Source: ASBFEO

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