In Australia, small and medium-sized enterprises (SMEs) are the backbone of the economy, accounting for around 98 per cent of all businesses.
As such, the annual budget announcement is always highly anticipated by SMEs, as it can significantly impact their operations and bottom line. The Budget 2023 has recently been released, and SMEs are taking note of the implications it has for their businesses. This year’s budget has received a lot of attention from small business owners due to economic uncertainties. Our experts look at the hits and misses for SMEs in the Budget 2023.
Hit on the funding initiatives
According to AIIA CEO Simon Bush, the 2023/24 budget has included crucial funding for several policy priorities that the AIIA has been advocating for. One of these is the Future Made in Australia Office, which has received $18.1 million in funding.
Bush has also praised the government’s efforts to improve procurement processes so that more Australian companies, including SMEs, can access the government’s $8 billion+ in ICT each year. “The budget has a welcome investment in a number of areas around cyber security uplift, which is vital for our economy, including SMEs and funding to target scams and regulation around data breaches.
“The budget importantly makes good on promises to change migration and skills settings so that high-demanddigital jobs and training is funded and supported, including assisting post-study work rights for Temporary Graduate Visa holders for in-demand skills and key sectors that the AIIA has been advocating.
“The AIIA welcomes the establishment of the $392m industry growth program aligned to early-stage commercialisation and the NRF priority areas. Whilst not all the funding is new, a significant component is and in particular, the increased grant allocation available to start-ups and SMEs of up to $5 million is welcomed to boost commercialisation of critical tech start-ups in Australia.”
Missed opportunity to support local food producers
According to Bianca Tarrant, co-founder of Our Cow, the Australian government missed an opportunity to address one of the biggest issues triggering the cost of living in the country. “The Government was clearly focused on delivering cost-of-living relief with this Budget, but it has missed an opportunity to address one of the biggest issues triggering it – the increasing costs associated with producing food in this country,” said Tarrant.
Tarrant mentioned the significant increase in prices of electricity, fuel, fertiliser, and animal feed in the last 12 months, which resulted in a rise in the cost of food. This puts local producers at a disadvantage when competing for the shopping baskets of Australians.
“While the Small Business Energy Incentive will go someway to help, we’re disappointed we didn’t see spending to support local farmers and the businesses that support them in this Budget,” she said.
Tarrant expressed her disappointment in the budget’s failure to ease the pressure on the small businesses based on the land, such as farmers and graziers who produce Australia’s food.
“It’s hard to make a living on the land, and it’s why we’re seeing a worrying trend away from the farming families who support local communities and toward the big corporations who buy up land and drain local communities of support and talent,” said Tarrant.
Moreover, Tarrant highlighted the need for telecommunications services in many rural areas, making it difficult to run a small business or bring innovation to fruition. “There’s so much innovation in the Bush, but it’s harder in regional areas to bring an idea to fruition. Telecommunications services are still very poor in many rural areas – we don’t have mobile coverage or reliable internet on our farm – which makes it very hard to run a small business, let alone get a new one off the ground,” said Tarrant.
Hit on the skill development program
SoHyun Kang, Interim Regional Managing Director of PMI’s Asia Pacific region, stated that the Australian Government’s allocation of $3.7 billion for a new five-year national skills agreement is crucial for small businesses seeking to enhance their workforce’s skill development.
Kang emphasised the increasing significance of project management training to ensure that the country has qualified individuals to lead future projects.
“We must stress the growing importance of project management training skills to ensure we have the pertinent people to lead the projects that will help the country reach its full potential. Government bodies, large enterprises, small businesses, schools, universities and TAFEs must collaborate to accurately identify gaps in the talent market and effectively equip our workforce with the right skills to prepare for the future of work.”
Troy Williams, Chief Executive of the Independent Tertiary Education Council Australia (ITECA) has welcomed the federal government’s investment in vocational training in this year’s budget, but he believes more could have been done to put students at the centre of the system.
According to Williams, the government’s funding commitments that favour public providers limit students’ options and offer a partial range of courses needed to address the skills shortage.
He argues that “the taxpayer’s investment in skills training should allow students to choose the training organisation that is best able to help them achieve their life and career goals,” but this ambition was not delivered in the budget.
Williams stresses that to make the investment more effective, students should be given more choices in selecting the training organisation that suits them best.
Julian Stevenson, Product and Workforce Development Director at RMIT Online explained that “the accelerating pace of change in the skills required for work demands more frequent exposure to training across the course of an individual’s working life.” He added that “closing the current skills gap is the first hurdle.”
Stevenson highlighted the importance of transitioning towards a mindset of lifelong learning aimed at the future of work, stating that “this is absolutely critical for the Australian economy to reap the substantial and long-lasting benefits, and supports the growth of our workforce into the future.”
“Research conducted by RMIT Online and Deloitte Access Economics found three in five (58 per cent) surveyed Australian employers still lacking one or more of the digital skills they require to do business, costing Australian businesses $3.1 billion annually. The additional investment allocated to the National Skills Agreement is an encouraging recognition of Australia’s need to improve the skills and training sector.”
He noted that the additional investment allocated to the National Skills Agreement is an encouraging recognition of Australia’s need to improve the skills and training sector.
Missed opportunity to counter anti-money laundering practices
Milan Cooper, the CEO of First AML, notes that more than the Australian government’s budget allocation towards anti-money laundering practices are needed. Cooper is very passionate about anti-money laundering practices and believes that stronger measures are needed to combat the increasing problem of money laundering and financial crimes in Australia.
Cooper expressed his disappointment with the government’s budget allocation of $14.3 million towards the Australian anti-money laundering framework for FY23-24, stating, “We note the Federal Government’s budget allocation for Tranche 2 reform and better AML practices, but we are disappointed that it falls short of what is needed to effectively combat the increasing problem of money laundering and financial crimes in Australia.”
Cooper pointed out that recent high-profile cases have shown the urgent need for strong and comprehensive measures to be implemented. He said, “The government’s failure to address this issue adequately in the past has put Australia at risk of being greylisted by FATF, which could have serious consequences for the country’s economy.”
Cooper urged the government to take more proactive steps towards preventing money laundering and financial crimes. He welcomed the upcoming consultation process but stressed that the government must commit to simplifying and modernising how Australia addresses this issue.
Cooper added, “As an industry leader in anti-money laundering and know-your-customer processes, we stand ready to support the government’s efforts to combat financial crime. We believe that a stronger commitment is needed to address this pressing issue and safeguard Australia’s financial system.”
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