Opinion

ASBFEO explains what the budget means for business owners

- May 16, 2024 4 MIN READ
Bag of money with words Federal Budget printed on it in front of a backdrop of Parliament House.

 

Australian Small and Family Business Enterprise Ombudsman Bruce Billson says the 2024-25 Federal Budget offers targeted support for small and family businesses to ease current pain points and headwinds, but is it enough?

I don’t think small and family businesses will be punching the air with excitement, thinking the budget is a real game changer for them.

A Future Made in Australia must be founded on harnessing the innovation and drive of our small businesses. Small businesses have a proven track record of lifting our nation – coming out of the global financial crisis, almost 60 per cent of the new jobs were created by small employers.

We need to get the risk and reward balance right, ensuring small business and entrepreneurship is a really attractive option for people, then create a supportive ecosystem to give enterprising people the best chance to be successful

As repeatedly acknowledged by the government, small businesses are doing it tough so those facing punishing input costs that are squeezing margins will welcome the modest energy bill relief of $325.

Every saving helps and this matches the money from the Australian Government in last year’s Budget. It will be deducted from the power bills of one million small businesses, but leaves the majority of the nation’s 2.5 million small businesses not eligible for this cost-of-business input relief. Unlike last year most states and territories are not making a matching contribution.

Instant asset write-off extended

Small and family businesses will be relieved by the decision to extend the instant asset write-off for a further 12 months for businesses with a turnover of up to $10 million, allowing them to deduct $20,000 for eligible assets.

But the instant asset write-off measure announced in last year’s budget has still not been passed into law with just six weeks left of this financial year. This creates unnecessary uncertainty for small businesses.

This uncertainty has highlighted the benefits of greater predictability to support business planning and investment, reflected by many small business groups calling for it to be made permanent.

I’m particularly delighted there is funding in the budget to continue two of the very important support services for mental and financial well-being for small and family businesses.

Mental health and wellbeing a budget focus

There’s $7.7 million over two years to extend the funding for mental health support through the New Access for Small Business Owners program created by Beyond Blue and $3.1 million over two years for the Small Business Debt Hotline delivered by Financial Counselling Australia.

We have seen a 20 per cent increase in calls to our helplines over the past year from small businesses struggling to manage their debts.

It is vitally important that small business owners take time to focus on their own mental and financial wellbeing and these free services are provided by people who understand the realities of running your own business and can offer practical help.

Small business owners know it’s a big responsibility to run a business but can still easily become overwhelmed by many of the pressures that are on them right now.

Their identities are interwoven into their business and the stakes are so much higher than just a job. Many people have invested a lifetime — and put their family home on the line — to build up their business, which amplifies the emotional challenges.

Small business owners feel acute pressure to ‘do it all’ and to keep up the appearance of being fine even when they were struggling with their mental health and wellbeing. They feel the livelihoods of others – family, business partners, employees, and suppliers – depend on them.

The New Access for Small Business Owners program https://www.beyondblue.org.au/get-support/newaccess-mental-health-coaching/small-business-owners provides emotional well-being support through a coaching program and helping small business owners know more about themselves and being in the best place they can be to make those important business leadership decisions.

The Small Business Debt Helpline https://sbdh.org.au is sadly a sign of the times. For many, new customers aren’t knocking their doors down. There’s not strong profits for the small business end of town even though the budget reports more receipts from big corporate taxes and the like. Managing those debt levels are quite difficult.

The budget also expands the scope of existing funding for ASBFEO to support small business in a dispute with the Tax Office to include unrepresented business dealing with a broader range of business disputes, including those involving franchising, and provides funding to review the adequacy and effectiveness of dispute resolution tools available to ASBFEO’s assistance service.

What about red tape?

There’s also some help to navigate increasing regulatory imposts as a lot of businesses are feeling really bound up in red tape. There is $20.5 million for the Fair Work Ombudsman to help small business employers comply with the increasingly complex workplace laws and $10 million to assist smaller employers with administering the revised paid parental leave scheme.

We welcome funding for key regulators to enforce mandatory codes that oblige telecommunications, banking and digital platform service providers to do more to guard against the harm caused by scams that are hurting too many small businesses.

The budget also includes additional funding to improve the uptake of eInvoicing, the effectiveness of the payment times reporting framework and implementation of franchise reforms.

While income tax cuts will drive demand, the budget forecasts that overall economic growth will be weaker.

Sluggish growth combined with persistently poor productivity, tight labour markets, supply chain challenges, and the lagging effects of high inflation, plus 13 interest rate rises, are taking their toll on small and family businesses.

We need small business people to be inspired to turn ideas into investment, to recruit that extra person and to invest in some technology.

Some 43 per cent of small businesses were not profitable in the last full tax year. Three-quarters of self-employed people, for whom their business is their full-time livelihood, take home less than average total weekly earnings.

We need to shift the mindset from minimising headwinds to maximising the ‘wind in the sails’ of our hard-working small and family businesses.

This post first appeared on Kochie’s Business Builders. You can read the original here.


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