Small business is at the heart of the economic recovery plans set down by Treasurer Josh Frydenberg in his Budget.
Measures including tax relief, apprentice subsidies and manufacturing grants are all part of the “game changer” Government investment, which is aimed at aiding Australia’s recovery from recession.
The measures have been widely welcomed by industry associations including the Australiasian Association of Convenience Stores (AACS), National Retail Association (NRA), and the Council of Small Business Organisations Australia (COSBOA).
AACS CEO, Jeff Rogut, told C&I that the support being offered through the Federal Budget was encouraging for the convenience sector.
“AACS is pleased to see the support being offered to Australians who have been doing it tough through the COVID-19 induced recession,” says Rogut.
“We believe that there is an opportunity for our industry to take advantage of the traineeship support on offer particularly as our industry has moved away from the traditional ‘automotive shop’ model towards a service and foodservice industry and we can offer greater employment opportunities as we evolve further.
“In addition it is encouraging to see that here was no announcement to continue excise increases at 12.5 per cent as per the past eight years. We have lobbied against the increase [as have others] and will continue our campaign to maintain this position in the May Budget, but given the current economic position this is a significant win.
“Tobacco remains the biggest sales category in our stores and the ongoing threat of illicit tobacco sales is one of the reasons we have sought a moratorium on these ongoing increases which just drives consumers to illicit tobacco as the cost of legal tobacco increases.”
The NRA has also praised the Federal Budget, with CEO Dominique Lamb saying that measures aimed at boosting consumer spending and encouraging business investment have been items long advocated for by the NRA.
“Bringing forward and backdating tax cuts for low and middle-income earners will mean that everyday Australians will now have more money in their hip pocket to spend at the shops. The need to restore consumer confidence was vital, particularly as we head into Christmas, and these tax breaks will go a long way to achieving that,” says Lamb.
“Christmas is not only the busiest time of year for retailers, it’s also the most important. Many small businesses rely on a bumper holiday harvest to survive leaner times of the year so the last thing any of them need is for consumer spending to drop between now and Christmas.”
And COSBOA echoes these sentiments, with CEO Peter Strong saying, “this is the budget we needed to have and there are some great things in it for small business people”.
He added: “This budget sets the scene for what’s to come. At the start of the pandemic we were treading water with JobKeeper and JobSeeker as we learnt what this new world entailed. This budget is an important next step in developing ways to adapt to our new world. We will have another budget in seven months’ time, giving an opportunity to fine-tune what’s being implemented, including how it’s being delivered.”
Strong further added: “Rent assistance for small business is needed, and this is one thing we are disappointed about in the budget. COSBOA is recommending the Canadian Model, which involves the Government paying a business’ remaining rent as a forgivable loan to its landlords. We should of course investigate whether it is suitable for the Australian market.”
The economy has continued to shrink during the COVID-19 pandemic and the Government has indicated its intention to spend its way out of trouble, with gross debt to hit $1.138 trillion by 2024.
At the heart of the Treasurer’s Budget is almost $98 billion in business and personal tax relief measures, which Frydenberg said are designed to create 950,000 jobs over the next four years, returning the economy to health.
Businesses with a turnover of less than $5bn will immediately be able to write-off, in full, any depreciable asset and there is no limit on value. These assets are the same as those already listed under the Government’s existing depreciation schedule, and do not include buildings.
Businesses that were previously profitable, but are now making losses as a result of the pandemic are also in line for immediate help through $4.9bn in loss carry-back provisions. This means that businesses, again with a turnover of less than $5bn, are able to write-off losses incurred this year and through until June 2022, against profits made during, or after, 2018-19.