To help our budding businesses flourish, we need to help them invest internally to reap the external economic benefits.
From improving digital capabilities and staff training to bigger investments like machinery and equipment, these investments carry a huge financial toll for small businesses and require support from the Federal Government. In addition, rising insurance costs and government regulations are an increasing burden on small businesses. Here’s what we can do to change that.
This is a considerable financial burden for businesses though, and as a result, requires financial support via tax relief from our government.
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This is a considerable financial burden for businesses though, and as a result, requires financial support via tax relief from our government.
Increasing the digital capability of small businesses is not aspirational but essential if we are going to see them grow and compete.
Retaining the 20% tax deduction bonus for small businesses to improve their digital capability and upskill their workforce is a must for the government not just for the next year or two, but beyond.
Productivity uplift for small business will come from a digital upgrade and a smarter, more highly skilled staff.
The impact of the pandemic has increased the rate of digitalisation by an estimated seven years within a two-year period. An additional tax deduction of 20% for business expenses and depreciating assets that support digital uptake, introduced in the 2022 Budget for a limited period, will greatly assist in the digitisation process. The ability for small businesses to claim the costs of new equipment such as laptops, payment systems, cyber security software and subscriptions to cloud-based services will be critically important. As we continue to rebuild the economy post-COVID-19 we are looking for innovative ways to help small businesses.
Small businesses that are digitising or may have had to pivot their business model in recent years now have a need for additional skills and training. To do this they need financial support to do so via tax relief from our government. The training and skilling of staff is a considerable financial burden for small businesses, and an additional 20% tax deduction for staff to undertake this will provide a much-needed incentive to invest in skills. The tax deduction bonus should be extended to sole traders who also need to upgrade their skills.
We believe that these two programs should run side by side for at least three years initially, and if they have been successful, should be extended indefinitely.
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Due to the pandemic, business investment has been down the last few years. The Federal Government need to encourage investment to help boost productivity and the economy by extending the temporary full expensing measure.
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Due to the pandemic, business investment has been down the last few years. The Federal Government need to encourage investment to help boost productivity and the economy by extending the temporary full expensing measure.
Business investment has been down the last few years.
The temporary full expensing measure needs to be extended at least until June 2025 to help drive economic activity.
Investment will help boost productivity and the economy.
Leading up to the pandemic, business investment in depreciable assets like machinery and equipment was already weak. This was exacerbated by COVID, which led to the introduction of a government initiative, TFE. Designed to help most businesses claim a deduction for the business portion of the cost of an eligible asset, TFE has helped to reinvigorate investment in Aussie businesses when we needed it most.
TFE is set to expire on 30 June 2023 though, with no proposed alternative to replace it. This would be a huge blow for businesses just as the economy is emerging from COVID-19 disruptions. To continue stimulating investment, TFE needs to be extended at least until June 2025 so businesses can keep growing and raising productivity.
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The past few years have seen significant and unsustainable increases in the cost of business insurance. Australia’s Federal Government needs to conduct a formal and comprehensive review of business insurance to support SMEs.
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The past few years have seen significant and unsustainable increases in the cost of business insurance. Australia’s Federal Government needs to conduct a formal and comprehensive review of business insurance to support SMEs.
The past few years have seen significant and unsustainable increases in the cost of business insurance.
To address the massive increase in business insurance costs, the government needs to conduct a formal and comprehensive review of business insurance with the aim of improving insurance affordability.
Options such as Discretionary Mutual Funds should be considered to address the significant increases in the cost of business insurance.
With a global pandemic still biting at our heels and the recent spate of natural disasters in Australia, insurance for a small business has never been more difficult or expensive. The cost of insurance premiums has risen by up to 200% for public liability, professional indemnity and general insurance. This is unsustainable and the Federal Government needs to conduct a comprehensive review, working with both the insurance industry and business customers. This will help identify ways of bringing the cost of insurance down.
A range of measures should be looked at including the use of Discretionary Mutual Funds, consistency of the civil liability legislation and a review of the taxation of insurance. In addition, the feasibility of expanding reinsurance pools such as the Northern Australia cyclone and damage fund to other locations and for other natural disaster risks would help future proof businesses.
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Government regulations for small businesses are currently time-consuming and complex. Investment in digital technologies like RegTech can provide new and better ways of regulating, helping ease the burden on businesses.
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Government regulations for small businesses are currently time-consuming and complex. Investment in digital technologies like RegTech can provide new and better ways of regulating, helping ease the burden on businesses.
Government regulations for small businesses are currently time-consuming and complex.
To address the complexity of regulation, the government needs to increase its investment in technology (RegTech) to reduce the time spent by SMEs on compliance.
The effective use of RegTech can greatly simplify regulatory compliance and reduce the administrative burden on small businesses.
A major frustration for small businesses is the complexity and time taken to comply with government regulations. Governments are the collectors and curators of much data, held across a number of departments and agencies. Small businesses are often providing the same information to several different arms of government.
The use of RegTech offers opportunities to better coordinate this data collection (tell-us-once approach) and make this data available in a range of forms, while still protecting the security of data and the privacy of the data sources. Governments can also make better use of data to improve their service delivery and the functioning of government.
A single digital portal, where much of the information can be prefilled based on information provided previously or to other government agencies, can greatly reduce the compliance and administrative burden of regulation on small businesses.
Our government has recently announced an increased investment in RegTech. This recognises what can be achieved. Yet, there is far more that can be done to improve the user interface of regulatory digital portals and reduce the information input requirements, and through greater data sharing between Federal Government departments, as well as between Federal and State/Territory government departments.
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Australia’s current regulatory environment is complicated and costs small businesses too much time and money without offering improvement in safety and health outcomes. Governments need to address cross-agency and regulatory duplication to reduce the burden on SMEs.
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Australia’s current regulatory environment is complicated and costs small businesses too much time and money without offering improvement in safety and health outcomes. Governments need to address cross-agency and regulatory duplication to reduce the burden on SMEs.
Australia's current regulatory environment is complex and costs SMEs too much time and money.
The Australian Government needs to reduce cross-agency duplication in workplace regulation.
A balance between regulation that keeps employees and the community safe but does not bury small businesses in red tape.
Everyone is entitled to a safe and healthy workplace, but it does not have to come at the cost of a huge red tape burden on business. Australia’s regulatory environment is complicated and prescriptive, inhibiting our productivity, growth and international competitiveness. As an example, the management of mental health in the workplace is as important as it is complex. Workplaces have to comply with WHS and Workers’ Compensation legislation, the Fair Work Act 2009 (Cth), federal and state anti-discrimination laws and the Commonwealth Privacy Act 1988 obligations in relation to mental health and psychological safety and injury at work. These intersecting obligations increase the regulatory burden, particularly for small businesses and make compliance more difficult, without offering any evidence of improvement in safety, health or productivity outcomes.
Currently, regulatory processes can take hundreds of hours and thousands to millions of dollars for companies to maintain records or complete complex applications followed by lengthy approval times. Australia needs a regulatory system that’s simple and outcome-focused to make it easier for businesses to establish, operate and grow whilst still maintaining the health and safety standards the community expects.
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SMEs are having difficulty securing funding for larger long-term investments and are paying high-interest rates. We need our government’s help to improve access to risk capital for firms through a private-public sector partnership model.
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SMEs are having difficulty securing funding for larger long-term investments and are paying high-interest rates. We need our government’s help to improve access to risk capital for firms through a private-public sector partnership model.
SMEs are having difficulty securing funding for larger long-term investments and are paying high interest rates.
We need the Government to improve SME access to risk capital through loan guarantees and private-public partnerships.
Loan guarantees and private-public partnerships will help Aussie SMEs to innovate and scale up.
Currently, SMEs are often labelled high risk by banks and are missing out on opportunities afforded to large businesses. Paying high-interest rates with shorter loan periods, SMEs are struggling to make larger, longer-term investments in capital that would improve productivity.
This limits the ability of many promising SMEs to achieve their full potential and make a substantial contribution to productivity growth in Australia, representing a huge market failure. We need to support our SMEs by enabling a loan guarantee for longer-term capital investments to help them scale-up and start-up, as well as improving access to risk capital for SMEs through a private-public sector partnership funding model. This will enable Aussie businesses to capitalise on R&D and commercialise innovation in Australia.
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Small and medium enterprises (SMEs) are often very environmentally conscious, however their achievements can be overlooked by the government.
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Small and medium enterprises (SMEs) are often very environmentally conscious, however their achievements can be overlooked by the government.
SMEs are often very environmentally conscious, however their achievements can be overlooked by the government.
The emission reduction efforts of SMEs should be better recognised and rewarded.
We should continue to provide support for businesses to reduce their energy consumption and reduce emissions from other activities.
Many SMEs have a strong environmental commitment, upholding environmentally-friendly values and actions like sending receipts via email, selling organic or sustainable products and helping fund renewable energy projects. Some are at the forefront of emissions reduction technology and are making a real difference.
But much can be gained from helping those small businesses still trying to navigate ways to reduce their emissions footprint through advisory programs and incentives. Also, some of the subsidy programs that have been available to households could also be extended to small businesses.
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The past few years of COVID-19, bushfires and floods has highlighted the important role government support plays for businesses to minimise economic and social costs. However, it can be unclear for businesses what level of support they can get. Australia needs a better framework for business support in times of disaster.
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The past few years of COVID-19, bushfires and floods has highlighted the important role government support plays for businesses to minimise economic and social costs. However, it can be unclear for businesses what level of support they can get. Australia needs a better framework for business support in times of disaster.
Experience through the bushfires, COVID-19 and more recently the floods in the last few years has demonstrated the importance of government support to business.
Australia needs a better framework for business support in times of disaster or pandemic.
Businesses can operate with much more certainty that governments will be there to support them when disasters hit that are beyond their control.
The pandemic, and the resulting restrictions imposed by the government to control it, plus the more recent natural flood disasters, had a huge impact on hundreds of thousands of businesses and millions of employees. Impacts beyond the control of those businesses – who became the victims.
As the COVID-19 crisis played out, business support became more ad hoc – more unpredictable. At the same time, some of the national programs were held up to questioning as to whether they were as targeted as they could have been. More recently, the flooding disasters which so severely impact the lives of households and businesses brought more unpredictability as to what support was going to be available to help businesses who had lost so much.
We need to take these learnings and invest time in developing a national framework to provide greater certainty for business support when disaster strikes, whether it be another pandemic wave or a calamitous event that stops a business in its tracks, affecting the livelihoods of its owners and its employees.
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