And its out. The Federal Budget for 2014. For you, fellow owners of SME’s, it is quite optimistic.
Aside from the fact that medical certificates will now cost $7 (this will sure be an incentive to not pull off sickies), and that fuel prices will probably never ever, ever come down, there are more benefits than downsides for SME owners. Here are some key things to look out for:
1. Small Business Ombudsman
$8 million has been allocated for a Small Business and Family Enterprise Ombudsman that will act as a “concierge for dispute resolution”. Apparently, this means less red tape compared to the old Australian Small Business Commissioner because of the new single entry-point model. I’ve never experienced anything like it so I can’t really comment but hopefully you won’t have to either.
2. Corporate Tax Rate cut
Before you get too excited, only one-third of Australian small businesses are incorporated. But for those lucky enough, the tax rate will decraese by 1.5% to 28.5%. Woooot. Enjoy paying the deficit tax levy instead.
3. R&D Tax Offsets cut
The R&D (Research and Development) Taxation scheme will be cut, which is extremely bad news for technology developers. I find it extremely ironic that I found this statement about how “Increasing investment in R&D is critical to boosting innovation, productivity and competitive advantage. It is good for individual firms and good for the nation’s economy” on the ATO website. But that will probably be taken down soon. Offsets will be reduced by 1.5%, which is expected to save $620 million over four years. Stingy much.
4. ‘Level’ playing field for SMEs and larger firms
The Unfair Contract Provision will be extended to SMEs and the consumer, with an estimated $1.4 million allocated to the ACCC. Also, $2.8 million will be allocated over four years for SMEs bidding for Government contracts. I’m not quite sure how this will be implemented, but sure, I’m up with anything for steps to improve competition and to kick some large firm bums.
5. 484.2 million Entrepreneurs' Infrastructure Program
A $484.2 million Entrepreneurs' Infrastructure Program is allocated to increase digital literacy (find my earlier infographic about digital literacy here) and “streamline business access to government programs.” Although there aren’t many details out there, this comes at the expense of a range of different funds and organisations such as Commercialisation Australia, the Enterprise Solutions program, Innovation Investment Fund, Enterprise Connect program and Industry Innovation Precincts scheme. That is quite a lot of scrapping right there. I’m quite sceptical about this one, because nowadays information is everywhere if you know where to look (wink wink my other articles on Savvy).
6. Capital Injection for Exports
A one-off cash injection of $200 million to the Export Finance & Insurance Corporation PLUS $50 million to the Export Markets Development Grants program. Probably will only directly affect SME’s dealing in exports, but hey, you never know when you might need government help in exports.
How will the Budget affect your business? Comment below!