October budget an “opportunity” to help SMEs with cost pressures, CPA Australia says, as Labor tempers expectations

The Albanese government is unlikely to reveal revolutionary cost-of-living support measures in next month’s federal budget, Treasurer Jim Chalmers says, despite rising inflationary pressures clamping down on households and businesses alike.

Appearing on ABC RN Breakfast Thursday morning, Chalmers downplayed suggestions his debut budget will feature spending commitments far beyond those already telegraphed by the government.

“Our priority is the cost-of-living relief we’ve already announced, and it’s difficult enough, frankly, to make room in a budget with a trillion dollars of debt,” Chalmers told host Patricia Karvelas.

“In leveling with people, we are being up front about them with the challenges in the budget,” he added.

Chalmers’ frank statement came less than a day after the release of June quarter GDP figures, which showed the economy grew 0.9% over the period.

The data reflects “an economy rebounding from the disruption of the pandemic”, Chalmers said.

However, Australia now faces “a deteriorating global growth outlook, continuing labour shortages, and rising interest rates which are straining businesses and households and creating headwinds for our economy over the year ahead”, he added.

The most recent consumer price index data shows inflation increasing 6.1% over the year to June, outpacing overall wage growth while also deepening small business expenses.

Navigating those challenges, while also mitigating what Chalmers has characterised as wasteful spending by the prior Coalition government, means the government intends to focus on “responsible” cost-of-living relief measures in October.

While the federal government downplays the chance of surprise cost-of-living measures for households or businesses, CPA Australia business policy adviser Gavan Ord says the October “mini-budget” could still carry on the positive momentum built in the Jobs and Skills Summit.

“It’s an opportunity for the government to take action on the challenges that small businesses are facing at the moment,” Ord told SmartCompany.

“And they shouldn’t let go of this opportunity.”

While CPA Australia is yet to finalise its pre-budget positions, Ord points to several policies the organisation believes could stimulate the small business sector.

A federal scheme providing financial incentives to small business to obtain professional advice would deliver “significant” benefits to the economy, he says.

Making temporary full expensing permanent past its scheduled end-date of June 30, 2023 would encourage further small business investment, he adds.

And, while CPA Australia is yet to solidify its views on draft legislation covering $1.55 billion in “bonus” tax offsets for small businesses looking to upgrade their technology and staff training, Ord says campaigns championing specific high-value tech could benefit the economy.

“We’re realistic going to this budget that it is not a full budget,” Ord said.

“But as I said, some of these positions, we’re taking long standing positions we’ve put forward to governments over many years.

“And [in] some of them, we believe there’s opportunities to progress them further in this budget, even though we know it’s a mini-budget.”

The next federal budget will be handed down on October 25.