Budget 2019 wrap up: Small business gets write-off increase but misses out on energy price relief

The Morrison government has delivered its election pitch to small business in the form of the 2019-20 federal budget tonight, quantifying a raft of previously announced policies and committing $525 billion to an overhaul of vocational training.

But in its biggest SME-focused measure of the night, another extension of the instant asset write-off, Treasurer Josh Frydenberg is left with two yet-to-be-legislated tax reforms and little time before the 45th parliament expires.

The Treasurer said on Tuesday hundreds of thousands of businesses will benefit from yet-to-be-legislated extensions to the write-off cap from $20,000 to $25,000 first announced in January, and again to $30,000 today.

Medium businesses will gain access to the scheme under the coalition’s election pitch, but not for the first time the government has baulked at calls to make the scheme permanent, leaving the deadline at June 30, 2020.

Previously announced measures, including fast-tracked SME tax cuts, the $2 billion business securitisation fund, $57.5 million for small-business tax disputes and $1 million for e-invoicing we’re also spruiked by the government.

A $525 million investment in skills, including doubling apprenticeship incentives for business to $8,000, will undoubtedly overjoy business groups, who were last week complaining of a “skills collapse”.

What’s missing?

Missing was any detail on what type of investment the coalition would seek to underwrite in a bid to boost energy supply, a pain point for small business amid skyrocketing electricity costs.

The coalition plans to hand out one-off payments for consumer electricity bill relief, but small business missed out.

The government did say there’s a shortlist of 12 projects that would add a combined 3,818-megawatt hours, or approximately 7% extra capacity to the National Electricity Market.

Also missing was any commitment to improve government communication with SMEs over the instant asset write-off and federal grant programs.

Despite this, more than $60 million was provisioned to help SMEs looking to take advantage of the recent spate of free trade agreements signed by the government.

Outside of the small business space, the coalition focused on tax relief for low- and middle-income earners, which it believes will help boost consumer spending, sorely needed for those in the retail sector.

Household consumption, at least according to Treasury modelling, is slated to increase from 2.25% growth in 2018-19 to 2.75% in 2019-20 and then to 3% in 2020-21.

Black economy

There was plenty of focus placed on the black economy and the ATO’s growing ability to tackle it, which, at least in theory, would help level the playing field for SMEs.

The coalition proposed giving the tax man an extra $1 billion to crack down on big business and wealthy individual tax avoidance.

Sham contractors and labour-hire firms exploiting workers are also under the microscope, with the Fair Work Ombudsman set to get more funding to crack down on dodgy behaviour.

But there was also a proposal to add red tape to the Australian Business Register, introducing a requirement for income tax returns to be filed as a condition for keeping an ABN.

Interestingly, there was a rather cryptic measure about single touch payroll, detailing a proposed expansion of the program that would require businesses to report additional data.

Departmental officials were unable to confirm what details would be included, but the government claims the changes will actually reduce the reporting burden for SMEs.

Other measures, such as $800,000 to implement recommendations outlined under last week’s Food and Grocery Council review, also made the budget papers.

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