Small business leaders do not expect Tuesday’s federal budget to funnel cash towards the sector, instead predicting policies designed to shield local enterprises without worsening inflation.
Speaking to SmartCompany ahead of the 2023-2024 federal budget, figures across the SME landscape said the kind of cash-splashing policies that protected business through COVID-19 lockdowns are rapidly fading into the past.
With annual inflation sitting at 7%, measures benefiting small businesses through higher consumer spending are unlikely, said Gavan Ord, business policy and investment manager, at CPA Australia.
“This week’s interest rate increase reminded us that high inflation is still a problem, he said.
“The government won’t want to add to inflationary pressure by spending big in this budget.”
While Tuesday’s federal budget will serve as the Albanese government’s first ‘full’ budget since taking power last year, Ord suggested Tuesday’s economic roadmap could echo last October’s budget, which was widely viewed as starting point for the new government rather than a fully-fledged economic reset.
“We wouldn’t be surprised if this one is similarly lean,” he said.
Guy Callaghan, chief executive of non-bank SME lender Banjo Loans, agreed that fiscal prudence is likely so long as the Reserve Bank of Australia keeps lifting the cash rate to battle inflation.
“What they’re going to have to be really careful of is to not increase consumer spending, which will obviously increase inflation again, which will mean the Reserve Bank will just keep going with what they’re doing at the moment,” he said.
“I don’t think you’ll see significant handouts because it’s just gonna put fuel on the fire.
“So it won’t be anything major. It’ll be tinkering around the edges.”
An energy bill relief package, which has already been flagged by the Albanese government, is the likely exception to the rule.
With grand spending seen as unlikely, industry players now expect the federal budget to champion cheaper policy tweaks and programs making it easier for businesses to prosper on their own.
Adam Joy, CEO of workplace product retailer Office Brands, said policies making it easier and more cost-efficient to access professional advice could greatly benefit the SME sector.
“We are calling on the government to support all small businesses in accessing professional advice that will see their business thrive, and in some cases ensure their business can survive,” he said.
Ord, whose organisation’s members would stand to benefit from increased business, agreed with the sentiment.
“We want incentives for small businesses to seek advice from a trusted professional, such as an accountant, to manage through these difficult economic times,” he said.
Slashing red tape is a perennial budget request, and the same is no different in 2o23.
“Reducing the red tape and complexity of running a business, employing staff and engaging contractors, compliance, and more… must be a priority, so that businesses can contribute to our economy at a greater rate,” Joy added.
“Another lever that the government can use to better conditions for businesses to recover from long COVID, is to reduce the red tape of reporting and compliance, and address the complexity of employee relations,” said Vincent Nair, executive chairman and CEO of SMARTECH Business Systems.
Although some business leaders advocated for the federal government to extend costlier initiatives like temporary full expensing past 2023, the sector broadly feels the federal budget won’t revitalise popular programs of the past.
Some 65% of small business respondents are not confident the budget will deliver a positive outcome for businesses like their own, a new MYOB survey shows.
Senior Business Journalist
Focused on the small business sector, David’s work covers the political, regulatory, and economic issues facing Australian entrepreneurs. Prior to joining SmartCompany, he was a reporter for Business Insider Australia. You can follow him on LinkedIn.
