The 2022 Federal Budget is crucial for small business survival: here's why

With the Federal Budget fast approaching, business owners are eagerly awaiting treasurer Josh Frydenberg’s delivery on Tuesday. As the economy rebounds from disruptions created by the pandemic, extreme weather and global conflict, the outcomes of this year’s budget are crucial for small business survival, writes Mark Khabe, co-founder Prime BPM.

Greater support is needed for small to medium-sized businesses, which are the backbone of the economy and employ some five million people across the country. Without this, many businesses will not survive the after-effects of recent events and the subsequent market instability.

What are small businesses calling for in this year’s budget?

Reduced tax burdens

The government needs to reduce the tax burdens for small businesses, by focusing on schemes such as asset write-offs. Small business owners, after incurring continuous blows over the last two years, need some relief and are hoping the government will deliver this by easing tax.

Assistance with hiring talent

Due to the huge inflation, the cost of hiring employees or maintaining employees has escalated. Furthermore, finding talent has been increasingly hard since the pandemic, with less market movement of staff during this time. A subsidy on recruitment and hiring will assist and encourage businesses to hire, which in turn would increase employment opportunities for job seekers.

Greater investment in digital

The post-pandemic world is now almost entirely digital, therefore embracing this change is critical for business survival. However, many businesses since the pandemic have been operating in survival mode, with limited budgets and increased conservatism around spending. The government therefore needs to create further SME digital support packages, which both incentivise and help businesses embrace the digital world. Such incentives will help businesses grow, to transcend borders for more opportunities and hire relevant talent from any part of the world.

The creation of digital hubs and providing hot desks to small businesses is a step in the right direction. To support the digital economy, the government should be at the forefront of it. By adopting a top-down approach where they promote digital operations and growth.

Better government procurement policies for small businesses

Another area of support includes supporting SMBs through government purchasing policies. A policy which provides some of the government’s purchase of goods and services from SMBs would help the nation’s small businesses. A quota for SMB procurement would level the playing field and provide greater opportunities for growth.

Removal of unnecessary regulatory red tape

Unnecessary regulatory burden or red tape is one area small and medium businesses are hoping the budget will address, as it hinders business competitiveness and affects economic productivity. The budget needs to focus on removing burdensome compliance requirements to free up administrative capacity, to enable small businesses to do more value-adding work.

Productivity improvements

Over the past two years, inflation has been skyrocketing and uncertainty due to COVID-19 has created a lot of instability for businesses. Given this scenario, regardless of the size of the business, productivity improvement has become super critical. Productivity linked incentives will prove extremely encouraging in this aspect to spur innovation and technology adoption. The financial incentives in the budget for productivity will motivate businesses to augment their output.

Business Process Management organisations, like ours, stand to benefit a lot from such incentives as it plays a very important part in productivity improvement projects.

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