Small businesses need extra support in this year’s budget or economy will suffer

- February 1, 2022 2 MIN READ

It’s not just Australians but the economy that may be in danger of “catching long COVID” according to the nation’s leading accountant body, CPA Australia. Gavan Ord, Senior Manager Business Policy at CPA Australia, suggests unless the government provides support for business in the 2022-23 Federal Budget, the economy will be negatively impacted and businesses will suffer.

CPA Australia has made a submission to the government ahead of the March budget suggesting the need for short term business support. The CPA suggests a long term economic transformation is needed, alongside targeted support, to ensure small businesses don’t continue to feel the negative impact of COVID lockdowns and restrictions.

Pandemic continues to disrupt business

“It’s increasingly likely that many businesses will experience ongoing disruptions for the whole of 2022, and potentially beyond,” said Ord. “Rolling outbreaks leading to worker shortages, supply chain issues and reduced consumer spending, may mean that trading conditions wax and wane all year.

“Accountants are staunch advocates of prudent financial management. Ultimately, the government must balance the cost of providing business support against the benefits and risks of doing nothing. On balance, we think the benefits outweigh the cost,” Ord explains.

COVID’s long-term impact on businesses

Ord says the economy is facing its own version of “long COVID” if support isn’t available to help businesses manage future outbreaks.

“The overall success of measures like JobKeeper and Cash Flow Boost in keeping businesses afloat will be undone if we make good businesses go it alone now.

“While we’re not opposed to direct financial support in some circumstances, we think the best approach is to use the budget to better prepare business to manage future crises and position them for growth.”

CPA Australia’s top budget recommendations to assist small businesses are:

  1. Support for digital transformation

Australian small businesses have one of the lowest levels of digital adoption in the Asia-Pacific, according to our annual Small Business Survey. As online business grows, so does the risk of being overtaken by global competitors with better technology. Other APAC governments have implemented ambitious programs to build small business digital capability. We must too.

  1. Increase the skilled labour pool

Skills shortages were an issue in Australia well before the pandemic. Increasing the size of the skilled labour pool is essential to supporting Australian businesses, jobs and our economy. The budget should increase the number of free or highly subsidised training places in areas with the greatest skills needs.

  1. Back off on new regulatory requirements

Governments put a lot of regulatory changes on hold over the past two years. Now is not the time to play catch up with this backlog. Including fewer new regulatory measures in the budget will give businesses the breathing room they need to focus on current challenges.

  1. Access to business advice

Distressed small businesses often struggle to access advice, even though it could mean the difference between survival and collapse. The government should consider providing financial incentives, possibly in the form of a voucher or grant, to help small businesses access advice from their trusted advisor.

  1. Economic transformation trumps debt repayment

Calls to pay down public debt will inevitably grow louder. In our view, Australia’s net debt is manageable and low by international standards. With our nation confronting economic issues such as weak productivity, an ageing population and climate change, the government’s long-term fiscal strategy should prioritise economic transformation.

You can read CPA Australia’s 2022-23 Federal Budget Submission here.

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