Budget wish list

When an excitement machine like Wayne Swan describes a forthcoming budget as “no frills” and “tradesman like,” two things cross my mind.

Either he’s trying the old under-promise-and-over-deliver trick, or he’s actually trying to soften us up for a Budget that will make the Government’s response to the Henry Tax Review look expansive.

Most commentators seem to be leaning towards the latter, and it does appear that this Budget will be lacking any major policy initiatives that the Government hasn’t yet announced.

Instead, we are likely to see a slew of smaller changes. A tweak to a definition here, some more money for an existing program there.

Of course, with these things the devil is almost in the detail and it’s crucial that entrepreneurs pay attention to items that can affect their industry – as we saw last year with the sudden decision to extend the Do Not Call Register to business numbers (a plan recently abandoned) this Government can spring the odd surprise.

So Wayne and Kevin, here are a few great ideas that would thrill the entrepreneurs behind Australia’s small and medium businesses:

• Change the definition of a small business. The Henry Review suggested increasing the ATO definition of a small business from under $2 million in turnover to under $5 million. This would instantly make thousands more businesses eligible for small business concessions and give many companies a real boost. Henry has researched and thought out the idea, the Government needs to make it happen.
• More funds for business assistance programs. While the economic recovery is clearly underway, conditions remain patchy and the Government would do well to ensure it strengthens support for SMEs through its assistance programs. This is particularly important if Australia wants to reduce its reliance on the mining sector in the future. More money for the seemingly always under-funded Export Market Development Grant would be welcome, as would any more money for R&D and early-stage technology development.
• Money for skills and education. The skills crisis is already hurting industries such as IT and construction and will slowly spread across the economy in the next 12 months. More money for training and education is essential, as is a commitment to retaining skill migrant programs.
• Ongoing infrastructure improvements. We should receive more detail about the Government’s proposed new $700 million infrastructure fund in the Budget, which will be welcomed by businesses of all shapes and sizes. This is one area the Government needs to make real progress in before the economy hits full capacity in the next two or three years.
• Cut red tape. If Wayne Swan is short on cash for Budget initiatives for small business, the least he and the Government can do is find ways to cut compliance costs. The Henry Review’s push for simplified tax returns for business surely warrants serious consideration.
• Fix the employee share scheme rules. It’s 12 months since the Government unleased it’s terrible changes to employee share scheme tax rules. While the Government eventually revised its original decision, it appears most SMEs have abandoned their schemes. It would be great to see this wrong righted in this year’s Budget
• Get rid of payroll tax. Yes, it won’t happen this year. Yes, it would be awfully difficult to do because it relies on the co-operation of the States. But when will one side of politics realise that pursuing this policy would be a sure-fire way to get entrepreneurs on side.

Don’t forget to check your inbox for a special SmartCompany Budget Bulletin later this evening and watch the website for full coverage and analysis.