Online lender Banjo Loans has revealed the five measures which small businesses are hoping to see in the upcoming Federal Budget, in what looms as a decisive day in the fortunes of SMEs across Australia.
With high inflation, high interest rates, difficulties finding labour and a reduction in demand across many sectors, supportive Budget measures will be pivotal for many small businesses.
Banjo CEO Guy Callaghan said that while concessions are often forthcoming for big business, in recent years SMEs have been short changed.
“The focus is always on the big end of town because they have larger tax contributions and have the staff and money to really push their case to the government,” Mr Callaghan said.
“SMEs are the lifeblood of the economy, but they’re too often the afterthought of governments who are distracted by easy wins.
“Small businesses can also be an easy hunting ground for more tax revenue, leaving them vulnerable when times are tough and potentially subject to more taxes.”
To make the case for support for SMEs in the upcoming budget, Mr Callaghan has revealed the Banjo Budget Wishlist:
1. Less Government red tape for essential items like property development projects: Red tape is stopping so much activity in the housing market, despite the need for new accommodation to support the immigration that is supplying the labour market. Reducing red tape will not only benefit SMEs in housing and construction but have the flow on effect of increasing accommodation options for much-needed staff across industries.
2. Establish more funding rebates, such as the asset finance rebate: These rebates drive additional business activity and growth and their benefit to the economy far outweighs the investment required by the Government. They support economic growth and provide access to opportunities that SMEs may not have otherwise considered.
3. Energy rebates concessions for SMEs, indexed to revenue size: With all small businesses trying to save on costs in today’s tough economic climate, reductions in operating costs are vital – so providing assistance to cover the cost of utilities such as energy would be very welcomed.
4. Reduce tax on SMEs to stimulate small businesses: Relaxing tax on the small businesses will free them up to first become profitable, then contribute to tax revenue down the track when their business has grown. Taxing SMEs in their early stages of development is a major hindrance to them becoming viable entities.
5. More support for training and skills development: Government analysis of skills shortages shows that 36 per cent of occupations assessed were in national shortage (332 out of 916) in 2023, 5 percentage points higher than the year before1. Support for training and initiatives aimed at upskilling the workforce can help small businesses meet talent needs and adapt to changing market demands.
Mr Callaghan warned small business confidence was shaky without an increase in Government support.
“SME’s have been doing it particularly tough over the past four years – since the onset of the Covid pandemic. They have not received a break in a long time – with Covid-19, a tight labour market, a string of interest rate rises and decreasing consumer demand.
“If SMEs don’t get some love from the Government they will continue to struggle, which will lead to a further slowdown in the economy and a longer road to recovery.
“Simple ideas such as funding rebates encourage growth and activity and enable businesses to consider opportunities, they would not otherwise have entertained.”
“Support for SMEs should be considered an investment rather than a cost to the Budget bottom line. It’s an investment in the engine room of the Australian economy, which will boost Australia’s competitiveness on a global scale.”
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