Small businesses on the brink in Australia are set to be tipped over the edge by a federal budget that lends no help other than a paltry $325 energy rebate and $290 million in ‘cashflow support’ by extending the instant asset write-off for one more year. This looks good on paper but a few hundred dollars’ worth of pocket change for their energy bill would be burned through in a matter of hours and no small business owner has $20,000 to spend anyway. Meanwhile, small businesses are closing their doors by the HOUR.
The government does know, however, that small business owners are struggling hence the continued $10.8 million for mental health support. While they’re not doing much to help small businesses thrive, they’re more than happy to give business owners a phone number to call when they’re on the edge — which I’m sure will be put to good use after this budget delivery.
The phrase ‘actions speak louder than words’ comes to mind when I think of what the small business environment will look like in the not-too-distant future and how little the government cares about putting in real policies to help stem the tidal wave of businesses collapsing.
Australian Bureau of Statistics (ABS) data shows thousands of small businesses are casualties in this hostile environment with new businesses hardly making an appearance at all. The increase in the number of new businesses in 2022-23 stands at 0.8%, the lowest in four years. Compared to the entry rate of 15.8%, the exit rate is 15%. Meanwhile, non-employing businesses have risen by 2.3%, which suggests a pattern of downsizing and cost-cutting among businesses.
Once again the most significant initiatives in this budget are targeted at big business and the top end of town, in particular, big businesses in the green energy space from cutting down red tape to encouraging investment in renewables to running women’s employment programs in male-dominated industries with a focus on the new energy space.
More money is being put into digital ID, which the community did not want in the first place, but no money has been put towards significantly reducing overheads like wages, rent, and insurance, or enticing more customers to get through the doors in the form of vouchers or credits. All this and more has been requested by the small business community which is keen to facilitate a robust small business economy.
At the same time, the Prime Minister claims to be pro-business, praising small businesses as central “to the continuing growth and resilience of our economy”. Another pain point is the ATO’s relentless campaign of terror against small business owners. As insolvencies are expected to exceed post-global financial crisis levels, aggressive enforcement action by the ATO to collect the billions in debt owed by small business owners will create more mental health crises than the government mental health support funding can possibly handle.
On top of this business owners are paying staff more money and entitlements than what they take home themselves. Some business owners are making no money at all. With recent industrial relations reform, they are also wasting more time on red tape and compliance measures while working long hours just to keep their heads above water.
Compared to the last federal budget where there was late payment amnesty for outstanding income tax returns as well as industry growth grant funding, there is hardly anything that will make a meaningful difference for small businesses. When additional spending seems to exclusively focus on areas like defence and the Future Made in Australia program along with the $90 million fee-free pledge to train 20,000 construction workers, one has to wonder why the government is so intent on pushing a particular agenda that favours net zero compliant businesses over the rest?
Any cynical person might say this is just another cheap ploy to gain kudos with voters in the lead-up to an election (which I sense will backfire spectacularly). Australians merely need to look back to this budget in 12 months’ time to see what the small business community has known all along — that this budget is all about painting a rosy picture to hide the rot inside.
Amanda Rose is the founder and CEO of Entrepreneurial and Small Business Women Australia.
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Amanda Rose is a brand strategist, speaker and founder and CEO of The Business Woman Media.
