In the run-up to this year’s elections, we consistently discussed two key topics in our interviews and interactions with small business owners. No, it’s not grants or financial aid, which are usually only temporary solutions that do little to help the business.
These two key themes are digitisation and compliance.
SMEs’ number one problem
Reduced tax burdens and decreased administrative work for taxation and compliance are key focus areas for SMBs. The Labour Party has vowed to implement a “responsible and measured” multinational tax avoidance programme to improve transparency and close tax loopholes.
It said it intends to implement anti-avoidance measures proposed by the Organization for Economic Cooperation and Development (OECD), which include a minimum 15% tax on multinational corporations’ profits, more equitable profit distribution (particularly from digital firms), and limiting debt-related reductions to 30% of a company’s profits.
And while the Labor Party’s proposed tax cuts will benefit everyone earning more than $45,000, Lower taxes for small businesses, in particular, are always a plus, especially for those still struggling following the economic difficulties of the previous two years.
While these promises appear to be spot on, SME owners are sceptical.
Chris Dahl, Director of Sales and Growth, Pin Payments, says that while Labor has briefly stated that support for SMBs is essential, specifically the digital economy, cash flow, and other age-old small business issues, there is little evidence to show what financial or tangible support will be provided.
“The business community is tired of false promises and a general lack of support, particularly after two years of lockdowns and the pandemic. We need to see a roadmap by the Labor government which outlines exactly how they will use funds to get every Australian SMB online, so these businesses are not left behind.”
As per the MYOB Business Monitor, which surveyed 1000 Australian SMEs a few days before the election about the issues they want to see prioritised and related insights, 66 per cent of SMEs consider compliance cost reduction to be their most crucial business-related issue.
Earlier, the Morrison government said it would give eligible businesses the option of reporting taxable payments system data via software. Businesses that choose automatic reporting will no longer have to fill out the annual Taxable Payments Annual Report. New systems will be in place by December 31, 2023, with implementation beginning January 1, 2024.
In addition, the government said it would create systems to allow all trusts to file income tax returns electronically. The ability to pre-fill beneficiaries’ tax returns will be made by digitising the reporting of trustee and beneficiary obligations.
SMEs want to ‘future proof’ their businesses
Returning to the MYOB survey, the second most important priority for businesses is digitisation, with 48 per cent of respondents saying they would vote for a government that provided more support to improve digital capability and business skills to ‘future proof’ their businesses.
However, one-third (31%) still do not have any online presence. Twenty-three per cent believe that digitising aspects of their business is still too expensive, and 29 per cent believe that some tax incentive would help them get started digitally, as per the survey.
The Australian Information Industry Association (AIIA) recently urged the newly formed government to appoint a Cabinet Minister for the Digital Economy.
According to AIIA, it is necessary to broaden the scope of digital accountability within a single minister’s portfolio. The proposed Minister of Government Services and the Digital Economy would be directly responsible for ensuring that Australia has a leading digital government by 2025 and a leading digital economy by 2030.
“In terms of Labor policies, support for digital technology adoption must be prioritised,” adds Mark Khabe, Co-Founder of PRIME BPM. “The post-pandemic world is digital. A stronger uptake of digital technologies will be key to helping SMBs grow, transcend borders for more opportunities and hire relevant talent from any part of the world.
“The Albanese government must invest in Australia’s digital future. A more robust digital economy will help small businesses to operate on a level playing field both locally and internationally.”
Top examples of business integration among SMEs using digital tools include tax and BAS lodgement and payments (51 per cent), compliance (38 per cent), cash flow, invoicing, and online payment platforms (40 per cent), and productivity, project, and inventory management (29 per cent).
Here’s the Pre-Budget and Pre-Election Policy Submission 2022, detailing 24 key recommendations to support Australia’s tech sector to grow by AIIA.
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