Home Articles What effect will the 2014 budget have on Australia’s small businesses?

What effect will the 2014 budget have on Australia’s small businesses?

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As the bedrock of our GDP health, the needs of SMEs are vital to the success of our economy.

Following the handing down of the 2014 budget this week, MYOB examined how SME owners will receive the changes this year’s budget presents, as well as what changes they would like to see implemented.

MYOB CEO Tim Reed says he is particularly pleased that the government has set a target of reducing regulatory compliance costs on businesses, individuals and the community by $1 billion every year.

He is confident that business owners will continue to call for tax reform, deregulation and reduction of red tape – MYOB’s latest SME research shows GST and BAS simplification still top the list of initiatives they hope to see.

Reed called on the government to keep tax reform on the agenda and to consider broadening the GST to not only address the needs of health and education spending but to also ease the burden of completing a BAS on Australia’s two million businesses.

What changes do Australian SMEs want implemented?

In an effort to get their voices heard, MYOB explored the initiatives and policies that SMEs would vote for. The survey found the following to be the top ten in order of popularity.

  1. Policies that significantly simplify the GST/BAS reporting process
  2. More Federal Government investment in transport infrastructure, including roads, highway and rail lines, in our major states & cities
  3. Keep the $6,500 instant asset tax write-off in play
  4. Keep the accelerated initial deduction for motor vehicles that allows small businesses to instantly write off $5000 on motor vehicles
  5. Increased Federal Government funding for skills, training & apprenticeship programs
  6. Government backed loans to small business start-ups
  7. The abolition of the carbon tax
  8. Increased Government funding for innovation, research & development
  9. Provide free Government-funded training to all small businesses on how to use the internet to enhance & grow their business
  10. A proportion of Government procurement contracts being assigned to small businesses

What 2014 budget changes will SMEs welcome?

With the retirement age set to increase to 70 by 2035, Reed believes SMEs stand to gain the most from taking up a new $10,000 incentive payment encouraging employers to hire over 50s. He encourages SMEs to keep this in mind as they hire staff.

Plans to facilitate innovation and self‑reliance via a new Entrepreneurs’ Infrastructure Programme will also be well-received by SMEs, according to Reed. MYOB research shows more than half of SMEs would support increased government funding for innovation, R&D and training on how to use the internet to grow their business.

The benefits of online technologies include the ability to compete on a more level playing field with both local and global rivals, increased productivity and less time spent on business administration. This translates into more time for growing the business.

Fuel prices still concern many Australian SMEs

Reed also hopes the rise in the fuel excise rate leads to increased investment in roads including highways and rail in our cities and regions, to help ease the pressure of rising fuel prices pointing to the fact that fuel prices was once again the top pressure point for SMEs this year, and has been since 2011.

He remarked that this change is likely to be the least popular part of the budget with SMEs, particularly so with agribusiness and Western Australian-based businesses which MYOB research found to be feeling the most pressure from rising fuel prices.

Reed suggests adopting online and teleworking technologies as a means to ease this pressure by enabling business operators to work from home or anywhere outside the office.

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