This year’s federal budget is all about supporting small business cash flow and helping employers to get Australians back to work.
Federal budget stats and facts
Fresh from the 2020 federal budget, Senator the Hon Michaelia Cash, Minister for Employment, Skills, Small and Family Business, alongside COSBOA CEO Peter Strong, outlined the very many incentives and initiatives announced at the Australian government’s presentation of the nation’s annual accounts at a recent Intuit QuickBooks live webinar.
Senator Cash stressed employment is the federal government’s main focus. “We have outlined a comprehensive plan to rebuild the economy and create jobs. This year’s budget is all about backing employers so they can prosper and grow.”
The senator opened the session by outlining the quantum of support that has already been provided to small business during the corona virus:
So far the federal government has invested $507 billion in COVID support packages and helped 3.6 million individuals and more than one million businesses, approving $65 billion in payments through JobMaker. An additional $74 billion in new funding has been set aside for the next stage of the JobMaker plan.
The federal government has already paid out $600 million to support businesses to hire apprentices and trainees, helping 90,000 businesses to employ 180,000 new starters.
$29 billion has been reimbursed to businesses through cash flow incentives such as JobKeeper, with 800,000 employers benefitting.
The federal government outlined a raft of new initiatives when it handed down the budget on 6 October and Senator Cash put some impressive numbers around these programs. For instance, the JobMaker hiring credit that will see employers who hire people been the ages of 16 and 28 be given a weekly credit of $200, with a $100 weekly subsidy employers who put on staff aged between 30 and 35.
The minister also explained why the federal government has focused this incentive on young people, which is expected to help 450,000 Australians. “They can be seriously scarred by the economic effects of a recession and this is to get them back to work.” She also noted the government is supporting businesses to hire older people through its Restart wage subsidy, through which employers can access up to $10,000 when they employ people over 50.
Driving personal and business cash flow
Bringing forward personal tax cuts will put more money in 11 million Australians’ pockets next year, said Senator Cash. But for businesses, the temporary carry back measures that will allow one million businesses employing 8.8 million Australians to write off tax losses incurred during the COVID-19 period against years in which they made a profit, going back to 2018, will help keep many businesses afloat. Temporary rules to allow businesses to write-off business expenses that cost up to $150,000 will also encourage smaller firms to invest in assets to help them grow.
Importantly, the $800 million JobMaker digital business plan will support businesses to adopt vital technologies such as Intuit QuickBooks. These funds will go towards helping businesses to establish a digital identity so they can better engage with governments and other businesses, implementing the Modernising Business Registers (MBR) program so firms can more easily access and update their business registry data in one location, support the rollout of the Consumer Data Right and accelerate the rollout of 5G technologies.
Also to help drive cash flow, Senator Cash said the federal government is introducing a policy so all large businesses with revenues of $100 million or more that do business with the government must pay their subcontractors within 20 days of being invoiced.
Commenting on these measures during the session, Intuit QuickBooks Australia country manager and vice president Natira Drayton said, “ these provisions will be critical for supporting local enterprises over the next four years. They recognise many businesses are struggling through no fault of their own and help bring balance back to their operations.”
Peter Strong, who has been working with the federal government to introduce many of these measures, said the government had put together an extraordinary list of the tools small businesses need right now. “This budget is a great base so small businesses can start to recover.”
Drayton urged small businesses to talk to their accountants and bookkeepers through this period, drawing on Intuit QuickBooks research from June this year that found the number one tip business owners of established enterprises would give new businesses is to work with an accountant or bookkeeper.
“Leverage the community around you and access government policies to help lift you out of this crisis period,” she said.
Intuit QuickBooks’ software has been updated to reflect the policy changes announced at the budget. Find out how it can support you to manage cash flow and operate to your full potential by accessing our free, 30-day trial.