Small businesses have been buffeted by the pandemic, inflation and shipping woes. The Morrison government plans to release the Federal Budget on March 29, just before the May election.
Over two million Australian small businesses and sole traders will benefit from the upcoming federal budget. The budget is crucial because it will shape the economy during a period of unprecedented economic headwinds caused by the Ukraine war, the still-lingering Covid-19 pandemic, and natural disasters.
We were curious to know what business leaders thought would be the most important in this year’s budget for businesses.
We asked three questions to learn more about their perspectives on the budget, what it should be for businesses and the general population, and the big picture.
What are the three most important sectors for business in the upcoming budget that require the most attention?
“With Treasurer Josh Frydenberg set to announce an $800m boost for small businesses as part of the 2022 budget, the business sectors that are most likely to benefit include those that are more labour intensive, as the government plans to bring the unemployment rate below 4 per cent.
“For example, hospitality, construction, retail and healthcare sectors will be amongst the biggest beneficiaries, given the focus around streamlining tax compliance and reporting, and cash flow support to invest in innovation and job growth.”
How will this year’s Federal Budget contribute to Australia’s economic recovery and job creation in the run-up to the Federal Election?
“As approximately 2 million SMEs and sole traders will effectively be provided with relief in the upcoming federal budget, approximately $1.85bn in cash flow relief is to be distributed, which averages around $800 per/business.”
“This additional cash flow will ultimately assist with upskilling staff and recruitment, in a high-vacancy environment, which has almost been devoid of any meaningful immigration over the last 2 years.”
What does the Budget mean for Australian businesses and the general public this year?
“Given the dramatic backdrop of COVID, global supply chain disruptions, the rising cost of both goods and labour, and of course Russia’s invasion of Ukraine, this year’s federal budget is of critical importance to Aussie SMEs and inherently the general public.
“The previous low-interest-rate environment has been conducive to rising house prices and the SME market enjoying record-low borrowing costs, but with extreme inflationary pressures likely triggering multiple interest rate increases in the coming year, many will be looking to the federal budget for support around the increasing cost of living, skill shortages and tax relief.”
What are the three most important sectors for business in the upcoming budget that require the most attention?
“We expect to see further investments in infrastructure, skills, digital transformation, energy, our regions and Australia’s sovereign manufacturing capability.”
How will this year’s Federal Budget contribute to Australia’s economic recovery and job creation in the run-up to the Federal election?
“The upcoming Federal Budget will certainly be pivotal to helping small businesses recover after a tumultuous few years throughout the pandemic. Just when we thought things would get easier, we felt the impact of Omicron, supply chain difficulties, and experienced the worst floods on record in Queensland and NSW. Cost of living has risen further as a result of petrol price rises and across the globe, we’ve seen the developing situation in Ukraine.
“In addition to extending targeted support for small businesses and those affected by floods, we expect to see further investments in infrastructure, skills, digital transformation, energy, our regions, and Australia’s sovereign manufacturing capability”.
What does the Budget mean for Australian businesses and the general public this year?
“With more positive economic indicators than in prior years, Budget 2022-23 should now look to the post-COVID-19 era and build recovery and confidence across all sectors of the economy.
“I expect a focus on targeted support for vulnerable businesses and addressing the cost of living pressures as the Australian economy continues to reopen. With full employment insight and momentum from a strong recovery, the focus should be on building sustainable growth for the future: rebuilding Australia’s fiscal buffers by reducing debt without risking growth (no ‘cash splash’ on one hand but no sudden ‘belt tightening’ on the other).”
What are the three most important sectors for business in the upcoming budget that require the most attention?
“RE: Budget. A of couple things have already been revealed by the Treasurer.
“Tailwind: Australia is the net exporter of energy. Higher prices will have a materially beneficial impact on our current account and national income. With commodity, oil, coal and gas prices rising a smaller than expected budget deficit is expected. At a national level, this is a net positive.
“With unemployment currently at a record low of 4.2 per cent, we are already seeing a rise in real/actual wages. Heightened wage growth will further enhance the associated tax receipts/national income side of the budget.
“We still remain deep in the red (by way of deficit). Pandemic forced measures, unprecedented natural disaster funding has been the driving force behind a mountain of debt. It will be smaller than expected deficit, but a deficit nonetheless.”
“Headwind: Higher energy prices have already started to translate into pain for Australian consumers at the fuel bowser. Coupled with the cyclical inflationary pressures that the covid environment has delivered, both facets heighten the risk of higher rates arriving sooner.”
How will this year’s Federal Budget contribute to Australia’s economic recovery and job creation in the run-up to the Federal election?
“It will be a fine balance between producing an accommodative budget to support households who are confronted by higher prices whilst controlling the expected rise of interest rates.
“The risk / path-off will be to address high prices without derailing the underlying good health of the national economy. By using the fiscal lever (vs the interest rate stick) to address higher prices, this will benefit highly indebted households in particular.”
What does the Budget mean for Australian businesses and the general public this year?
“How the budget could play a role in supporting households:
How the budget could play a role in Support for businesses:
Finally, we’re reminded that it is an election year, more money will be spent than what we’d expect otherwise.”
What are the three most important sectors for business in the upcoming budget that require the most attention?
Creating the Great Silicon Reef
“Australia has had several successful start-ups that have scaled on a global level, but much more needs to be done to nurture the next generation of Australian innovators and entrepreneurs. This begins with a change in mindset. We must view Australia as a hub for technology creators, as opposed to technology adopters.
“More government investment into Australia’s start-up ecosystem has the potential to spawn the next round of innovations, just like it did in Silicon Valley. Now’s the time to invest in the Great Silicon Reef.
“This type of funding would support the creation of incubation centres where companies can work when they first launch, enabling them to share ideas and thrive in their early stages. The government’s R&D tax incentive should also be reviewed and revised as not all R&D starts from scratch.
“There are many companies that build on and evolve existing innovations, but these are not included in the current incentive. Instead of limiting government support to new innovations only, it should expand the scope and allow greater flexibility.”
Cultivating a STEM workforce
“While the Federal Government has financially supported the creation of a skilled workforce, much more needs to be done to cultivate a STEM workforce. We saw Australia’s tech industry crippled by the lack of talent during the pandemic as international borders closed and Australian companies survived on a small pool of local employees.
“Being able to enrich a team with talent from overseas is what makes Australia’s tech sector great. However, relying on international employees to fill a void created by a lack of home-grown talent is not a long-term solution.
“We need to start fostering a genuine interest and passion for STEM subjects amongst Australian students in secondary school, as well as encouraging more girls to venture into STEM. This could be in the form of more scholarships and training opportunities for students.
“There should also be funding available to re-train existing employees, as well as providing support to Australians that might be looking to pivot their career into the technology sector.
“Support for employees in rural and regional Australia is often overlooked, yet the pandemic has changed the way employees operate and proved that they can work from anywhere. With better infrastructure in regional Australia, such as investment in high-speed broadband and improved mobile connections, more companies will be able to employ people from across the country regardless of where they call home.”
Enterprise Share Scheme (ESS)
“The government needs to offer greater flexibility in the Enterprise Share Scheme (ESS), including making it easier for smaller companies and start-ups to realistically offer their employees equity and more rights, without limitations, and better tax treatment.
“This has the potential to be a game-changer when it comes to retention and productivity in a tight job market, especially as start-ups don’t often have the resources to match competitive salaries offered by big corporates. And, if the stock ends up being worth something, the government wins by virtue of tax gains.”
What are the three most important sectors for business in the upcoming budget that require the most attention?
Skills shortage
“A shortage of skilled technology professionals in Australia has put a major handbrake on the growth of the local industry. There is a clear role for the government to facilitate and incentivise the learning required for in-demand tech roles and keep up to date with new digital capabilities.
“We must invest in the development of new training models that focus on areas such as cloud, artificial intelligence and data security, alongside a nationwide digital skills standard to foster a strong local talent pool.”
Sustainability
“The data centre industry has among the highest carbon footprints in the world — in Australia alone, data centres account for approximately 3.9 per cent of the country’s total electricity consumption. With demand for data centres expected to remain high, business leaders and government must come together to address industry impact on the environment and ensure that data centres are sustainable for the future.
“It would be worthwhile for the government to review the success of Europe’s Climate Neutral Data Centre Pact, which introduced an industry-wide standard that defines clear, measurable goals to ensure rapid progress for a greener, more sustainable future.”
Digital transformation
“The shift towards digital transformation is surging 20 to 25 times faster than expected, especially in Australia where the digital economy continues to flourish. The challenge now for businesses is to review digital projects that have been implemented during the last two years, and manage their cloud infrastructure and cost of their digital services, to ensure long-term growth, agility and transparency.
“With ongoing disruption and innovation, it is critical that the government supports businesses in their digital transformation and encourages uptake in cloud technology, investing in subsidy grants for a leading, digitally-driven nation.”
What are the three most important sectors for business in the upcoming budget that require the most attention?
“Whilst consumer sentiment was looking up in February according to the ABS, a convergence of crises has turned the tides yet again with the Consumer Sentiment Index declining 4.2 per cent month on month in March.
“Between the conflict with Russia and Ukraine, the catastrophic floods and predictions of interest rate hikes, retailers are understandably concerned that this will lead to purchasing hesitancy amongst consumers.
“What we really need to see from the government is an investment in minimising the impact of the rising costs of living. The last thing the economy needs is rising fuel and housing costs to damage other sectors that have barely made it out of the pandemic alive.
“Measures like cutting fuel taxes and improving childcare subsidies would go a long way in making sure that Australians have more confidence in their spending power to keep the economy strong.”
Keep up to date with our stories on LinkedIn, Twitter, Facebook and Instagram.
source
This post was aggregated from Dynamic Business (https://dynamicbusiness.com).