Industry leaders reveal federal budget wish list

The Federal Government is reportedly including a number of incentives for small businesses in next month’s budget, as SMEs prepare to face the toughest economic conditions in decades.

While the Government has not yet revealed any details about the budget, it is likely to be considering extending, or even expanding, the 30% tax deduction for business investment that was announced in February.

Under that measure, small businesses can claim an additional 30% tax deduction for eligible assets costing $1000 or more that they acquire from 13 December 2008 to 30 June 2009, and install ready for use by 30 June 2010.

Greg Evans, director of industry policy and economics at the Australian Chamber of Commerce and Industry, says he wants the investment allowance extended beyond its 30 June expiry date. 

“We’re a proponent of the investment allowance, so we’d like to see a successful implementation of that. There’s a lot of discussion whether that needs to be extended, so that’s something that we would be favourable towards.

“On a wider front, we have some long standing taxation policy objectives, such as a reduction and the eventual abolition of payroll tax.”

Jaye Radisich, chief executive of the Council of Small Business Organisations of Australia, says the Government should focus more on business training and education and avoid more cash-based stimulus.

“Essentially we’d like to see investment in business infrastructure, education and training to support small businesses to prosper in the future and stimulate jobs growth.”

While Radisich says COSBOA is preparing a budget submission that will be revealed in the next few days, she condemns any plans there may be for further stimulus packages that do not help small businesses.

“We don’t support the kind of cash injections and individual cash handouts that have been the hallmark of the last stimulus package. That doesn’t help small businesses in the current economic environment, and particularly companies in rural Australia.”

Victorian Employers’ Chamber of Commerce and Industry spokesman Chris James has said that the budget is an “opportunity” for the Federal Government.

“The federal budget is an opportunity to boost business confidence by keeping business taxation competitive and also boosting infrastructure spending where appropriate to both stimulate the economy and achieve greater economic efficiency,” he said.

The Australian Industry Group has also said in its budget submission that the Government should introduce additional personal income tax cuts, new public infrastructure and cashflow relief for small businesses.

It also suggests “selective boosts to training, education and the development of business capabilities”.

Treasurer Wayne Swan has also said an investigation will be launched into the lack of credit availability for small and medium sized businesses.

He has asked the Australian Prudential Regulation Authority to monitor whether banks are “rationing” credit, and will start an investigation into the effects of the credit crisis on small businesses.  

Evans has welcomed the move, saying that “while this is not necessarily a budget measure, the Government does need to look at the issue of credit availability”. 

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