One of Australia’s biggest working capital providers has given Australian Broker their take on the Federal Budget and what it means for the small and medium business sector.
Treasurer Josh Frydenberg announced a raft of new measures to boost the Australian economy, including a new arbiter between the Australian Tax Office (ATO) and SMEs, as well as tax cuts for both businesses and workers.
For ScotPac CEO Jon Sutton, the tone was as important as the content. “The budget aims to be a confidence-booster, so for me the biggest takeaway is that I’d like business owners to see that steps are in place and they should have the confidence to invest in their own growth,” he said.
“Now is the time to move forward - this is a conversation that brokers can be having with their small business clients. The economy is heading in the right direction, invest now in your business so your competitors don’t leave you behind.”
Tax write-offs for assets have also been included, which Sutton welcomed.
“It is an important initiative, we’ve seen that with our own clients whether it’s a manufacturer buying a more modern piece of equipment or a tradie upgrading their vehicle,” he said. “This write-off was introduced as a temporary measure about six years ago but has proved very popular with the SME sector. While it is now meant to expire in June 2023, it would be great to see the small business instant asset write-off become a permanent part of tax legislation.”
Sutton said that there was still more work to be done for SMEs to recover. “Our SME Growth Index findings consistently show that business owners see red tape and compliance issues as their biggest barriers to growth,” he added.
“There have been some positive tax reform including a reduction in small business tax rates, but a real game changer would be if the Federal and State Governments worked together to remove the ‘tax on hiring’, payroll tax.”