The federal budget must support business

For God’s sake, Kevin Rudd. Can we please have something in this federal budget for business?

And I don’t just mean small business. Look, I love small business. I run one. But it takes a few good growth spurts to become larger than a small business. So what we need in this budget is some relief for small and medium businesses so they can keep their employees and therefore keep jobs.

As we report today, new statistics from Dun & Bradstreet show that 130,000 businesses are at increased risk of failure in the last six months. Businesses are being pinched at one end from people not paying cash and at the other by not being able to borrow cash. The credit crisis is just going to get worse, as the IMF points out today.

With so much bad news and companies working on their budgets for 2009-2010, there could be one bright spark on the horizon. Companies are hoping there might be something in the May budget that might encourage them to be able to keep employees or even create a few jobs.

The Government needs to understand how much business owners want to preserve their staff and help them to do it. If there was a tax incentive, say a reduction in payroll tax, for any staff who are taken on in the next six months, that would help. Or how about a payroll tax reduction for the next year?

Otherwise I fear that after the budget, many businesses will be forced to include retrenchments in their projections that will not only increase the unemployed but hurt these businesses further.

There is another reason the Government should listen. I have heard there has been an increase in desperate companies calling on government asking for help. Many are failing, not because they are poor businesses, but because their bills are not being paid. They believe they are suffering through no fault of their own and are looking around for someone to blame.

So far the Government has done almost nothing to help business (unless you are in the Carr industry.) In fact it has scrapped $1 billion of assistance to business over the last year and in return has promised an innovation package that has Buckley’s of being delivered.

Unless there is something for business in the May budget, this Government had better get ready for a backlash – and a big climb in unemployment.