Home featured Economy Featured Opinion Economy Federal budget impact on small business Guest Author May 14, 2014 Pain is the buzzword surrounding this budget particularly for small business. A first term coalition budget following an election year is often draconian, the purse strings tend to become relaxed as elections approach. However, with no election imminent, many of the hard decisions are being made now. While the government is rightly attempting to put our fiscal position on a sustainable footing its sense of urgency seems to be at the expense of long-term, broader reform to the tax system. Changes to social security for both older Australians and middle income families, the new deficit levy and fuel excise tax increases, along with the scaling back of depreciation instant write-off allowances are all going to hurt small business. This budget is about ‘sharing the pain’. The idea being that if we all tighten our belts, the camaraderie will help us through this tough period. Unfortunately the ‘share the pain’ approach misses two important points. Firstly, small and medium-sized enterprises (SMEs) who are the largest employer in Australia have not shared in the spoils for some time. Direct assistance to SMEs has lagged behind other sectors of the economy. Secondly, while the government should focus on debt and deficits, growing the economy and jobs is equally important. With strong GDP (national income) growth, debt is less of an issue. If small business and its customer base are taxed more heavily, the government may end