Budget 2019: Small businesses turn minds to skills, investment

Issues like small business funding and payment times have been prominent in recent policy debates but the small business community is not convinced it will get a large slice of the government’s multi-billion dollar war chest in Tuesday’s budget.

Head of the National Council of Small Business of Australia, wants training policy to be front and centre of the budget.
Head of the National Council of Small Business of Australia, wants training policy to be front and centre of the budget. CREDIT:SITTHIXAY DITTHAVONG

“It’s going to go to voters. First of all to individuals, second of all to Australian-based small businesses,” BDO tax partner Mark Molesworth predicts.

In that environment business groups and experts have pinned their hopes on three key areas in the lead-up to budget 2019: digitisation, training and investment policies.

Smaller operators called strongly for an overhaul of vocational education in the lead up to the government’s mid-year statements and pressure is still on to see a clear national plan for training and TAFE in the budget papers.

Council of Small Business Organisations Australia chief executive Peter Strong expects to see a new blueprint that he hopes will focus on stronger links between educators and industry.

“What I hope is that it’s empowering of industry and we’re hoping it’s not just a focus on apprenticeships,” he says.

Minister for Small and Family Business, Skills and Vocational Education Michaelia Cash has previously told businesses that a plan for training, particularly in regional areas, is a priority.
Minister for Small and Family Business, Skills and Vocational Education Michaelia Cash has previously told businesses that a plan for training, particularly in regional areas, is a priority. CREDIT:ALEX ELLINGHAUSEN / FAIRFAX MEDIA

Minister for small and family business Michaelia Cash has been tight-lipped on specific budget policies but outlined back in December the government would continue to focus on training policies, particularly for regional communities.

The local startup community has also been crying out over technology skills shortages and asking for a broader plan to develop tech talent.

“Our education sector needs to really take a look at itself on how we’re teaching modern technologies,” Oceania growth lead at EY, Rob Dalton, says.

Dalton hopes to see a broader innovation plan emerge once more, including a strategy for developing startup skills and generating startup investment.

I get to see a lot in the emerging company sectors around the world. We are not being as proactive here as others are.

Rob Dalton, EY.

“It’s a really important area, and I get to see a lot in the emerging company sectors around the world. We are not being as proactive here as others [overseas] are,” he says.

From cyber security to the introduction of single-touch payroll to all Australian businesses, digitisation has been a key policy theme of 2018 and 2019.

Molesworth hopes to see some incentives and support mechanisms in the budget papers for smaller operators to upskill and prepare to use new digital systems well.

“There are lots of sticks out there at the moment and not many carrots,” he says.

Managing director of small business accounting firm Xero, Trent Innes, agrees there should be a clear way for companies to check their progress on digital with experts.

“We would like to see an incentive for small businesses to interact with advisers for information and help on digitisation,” he says.

Minister Cash says digital capability is a key focus of the small business portfolio.

“We want Australian small businesses to remain competitive and helps them to thrive in the digital economy by helping them get online, establishing digital infrastructure, investing in cyber security, and upskilling Australians,” she says.

BDO tax partner Mark Molesworth
BDO tax partner Mark MolesworthCREDIT:AFR

Startup investment

There’s hope the government will clarify its position on the future of the instant asset write-off scheme and the research and development tax incentive scheme.

The instant asset write-off scheme has been pledged until 2020 but this has not yet been legislated. The policy allowing businesses to immediately write down the value of assets has been widely popular across the community, but Mark Molesworth believes it may get lost amongst other bigger measures.

“Businesses, you really can’t rely on it,” he says.

The government has been contacted for comment on the long-term future of the scheme and says the bill to extend the policy to 2020 will be part of a range of measures it will try to pass in the final sitting days of parliament.

The government attempted to make changes to the research tax scheme at the beginning of the year to cap amounts that could be claimed, but this has been temporarily shelved after a senate committee report found more detail of the impacts needed to be hashed out.

Dalton says attempts to change the scheme didn’t make sense in the context of boosting the economic returns startups can bring.

“The majority of the startups really require it – they rely on that funding [through the offset]. It’s often a runway to their success.”

SourceAAP:www.smh.com.au

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