Small business groups urge the federal government to offer $5,000 financial advice subsidies to SMEs

Accounting and small business groups are urging the government to give SMEs financial incentives to seek out advice from financial advisors after JobKeeper comes to an end next month.

CPA Australia, Chartered Accountants Australia and New Zealand, the Institute of Public Accountants, the Institute of Certified Bookkeepers, the Australian Small Business and Family Enterprise Ombudsman and the Council of Small Business Organisations Australia jointly proposed the subsidy program, aimed to help viable small business access financial advice as coronavirus emergency relief winds down.

The program would give small businesses with up to $10 million in annual turnover a subsidy of up to $5,000 to access a 15-month financial plan from an accredited advisor.

The proposal for a financial advice subsidy comes after a recent study on the cost of advice fees revealed they’ve increased by 22% since 2018.

The median fee charged by 1,500 advisors surveyed was $3,256 in 2020 as compared to $2,510 in 2018, according to data from Adviser Ratings’ Financial Advice Benchmarking study.

Accounting and small business groups put their proposal to the federal government as part of their pre-budget submissions, as the government seeks the public’s input for the upcoming budget which is set to be delivered later this year.

In its 2021-22 federal budget submission, CPA Australia recommended the government boost support for otherwise viable businesses that continue to be impacted by COVID-19.

Jane Rennie, CPA Australia’s general manager external affairs, said many businesses and not-for-profits are still focused on survival.

“They have limited capacity to implement new policies or regulatory requirements unless they directly benefit their business,” she said.

“Small business is Australia’s biggest employer. Its importance to society cannot be understated.

“It is in the public interest that viable businesses are supported through this time so that they can continue to create jobs and sustain our economy.”

CPA Australia made a total of 29 proposals in its submission, including recommendations that the government:

• Establish criteria to identify industries requiring targeted assistance;
• Extend JobMaker to over-35s and beyond October 2021;
• Fund small business and not-for-profit digital transformation;
• Assist Australian exporters to diversify their markets;
• Support distressed small business to seek professional advice; and
• Fund the winding up of asset-less companies in distress.

Small business groups have been urging the government to subsidise financial advice for small business owners since September last year.

Data from the Australian Small Business and Family Enterprise Ombudsman suggests that a professional advice subsidy could provide 500,000 small businesses with support at a cost of $1.5 billion to the government.