This year’s federal budget includes a host of initiatives to help small business:
The 2020 federal budget, which was handed down in October this year rather than announced on its usual date on the first Tuesday in May, has outlined a huge program of initiatives that will buoy economic growth through the COVID-19 period and long into the future.
But these nation-building, COVID-busting plans come at a cost. The budget papers [1] show the deficit will reach $213.7 billion this year, before falling to $66.9 billion by the 2023/24 financial year. On top of this, net debt will reach $703 billion or 36 per cent of GDP this year and peak at $966 billion or 44 per cent of GDP in June 2024.
Additionally, economic growth is expected to drop by 3.75 per cent in 2020. But expect a stunning about-face in 2021 when Treasury expects the economy to grow by 4.25 per cent. To achieve this turnaround, at this year’s federal budget the government revealed a comprehensive plan to put the economy back on the path to growth. Jobs creation and progams to boost consumer and business confidence are at the heart of its plans. Once economic growth is back on track, the Coalition will commence measures to get the budget back into surplus.
Intuit QuickBooks customers will be pleased to note the federal governments has allocated $800 million to improve access to digital services for businesses. This includes $420 million to accelerate the government’s plans to create a single business registry and remove more red tape, and $22.2 million to help small business owners take advantage of digital technologies, which can increase productivity and automate simple tasks, and more easily access government support, such as JobKeeper payments.
The federal government’s plan to assist small businesses centres on tax incentives to get firms spending and drive their growth. It includes:
Intuit QuickBooks Australia Country Manager, Natira Drayton notes the immediate impact of tax cuts will encourage businesses to spend.
“We welcome the loss carry-back provision to boost cash flow, which will be an important lifeline for businesses struggling temporarily because of the pandemic’s impact. We know from our research cash flow is the biggest pain point for small businesses, so the impact of this policy cannot be under-estimated,” she said.
Drayton also noted businesses will benefit from the Prime Minister’s pre-Budget announcement regarding mandating the adoption of electronic invoicing by 1 July 2022 for all Commonwealth government agencies.
“E-invoicing has the potential to significantly improve payment times for small businesses and reduce the friction of manually entering, scanning, printing or posting invoices. The announcement will encourage greater adoption among businesses supplying to the government and within their supply chains.”
At this year’s budget the federal government outlined a solid range of programs to boost manufacturing, on top of a huge number of nation-building infrastructure initiatives.
The centrepiece is a $1.3 billion Modern Manufacturing plan focused on driving growth in the following industry sectors:
The federal government has also expanded its 10-year infrastructure pipeline, including an extra $14 billion for new and accelerated infrastructure projects, which will create 40,000 jobs. On top of this, $7.5 billion has been allocated [2] for national transport infrastructure projects, such as $2 billion in road safety upgrades and $1 billion local councils road upgrades.
Major projects include:
The federal government has also committed more money for research and development, including:
These projects will have myriad benefits for small business:
The funding set aside for these project is on top of $11.3 billion already allocated to infrastructure in response to the COVID-19 pandemic.
Businesses in rural and regional areas were not forgotten. Some of the projects the government is backing include:
Not only will these projects help lift Australia out of its COVID-19 recession, they will also provide the foundation for long-term economic growth and an exciting future for the small businesses on which this nation is built.
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