Raghu Rajakumar, CEO and Co-Founder of Australian business marketplace Eden Exchange discusses areas where the government has allocated funds effectively and could positively impact SMEs, where the government could have done more or should have allocated funds differently, as well as some notable omissions or surprises in this year’s Federal Budget.
Supporting innovation, technology and investment
We’re pleasantly surprised by the $392 million assigned to launch the Industry Growth Program. The initiative opens exciting opportunities for small businesses and startups to commercialise their concepts, strengthen and scale operations while contributing towards a more innovation-first Australian economy.
We’re also pleasantly surprised by the $101.2 million over five years to be used to support small businesses integrating quantum and AI technologies into their operations. This is a major opportunity for organisations to foster innovation and for businesses like ours at Eden Exchange, who are already integrating and assessing the impacts of these on our services and technology.
Increasing VACs from July 1 2023 with an additional 40 percentage points is adding additional costs to investors and venture capitalists wanting to come to Australia, with requirements for business innovation and investment visas. We are somewhat surprised by this announcement, as we are seeing the emergence of major economies around the world looking to invest in innovative Australian businesses.
Instant asset write off, regulatory burden and cash flow relief
The $20,000 instant asset write-off increase is welcome news. This is forecast to help around 3.8 million small businesses with an annual turnover of less than $10 million.
In an attempt to protect small businesses operating on thin margins, the federal budget is also introducing a new way of calculating the increase of Pay As You Go and GST payments, with the current 12% GDP adjustment factor halved with a new 6% rate. Meanwhile from July 1, 2025, small businesses will also receive up to four years to amend their income tax returns, reducing the burden of making revisions.
Incrementally, these measures will help save time, give much needed relief in uncertain economic conditions and help alleviate some of the pain points of inflation and rising overhead costs.
Supporting a greener economy
We also welcome the news that small businesses will be encouraged to buy energy-efficient assets, and that the energy bill relief is available to small businesses. It’s also great to see that companies with a turnover of less than $50m can now deduct an additional 20% of the cost of depreciating assets that are eligible under the small business energy incentive measure. This is a significant step towards becoming more energy-conscious and supporting a greener economy.
We’ve all seen data privacy issues making headlines this past year, so it’s welcome news to see the federal budget providing $23.4 million to go towards the Cyber Wardens program, a digital resiliency and cybersecurity program launched by the Council of Small Business Organisations Australia (COSBOA). This is a positive step towards supporting small businesses to build resilience against cyber threats. However it is long overdue, and the pressure is now on to activate the protection measures for businesses swiftly in the face of increasing cyber threats.
Opening government contract opportunities to small businesses
Traditionally, Australia’s small businesses have often been overlooked during high-value government contracts, with application processes often leaning towards bigger competitors. The federal government claims its ‘Buy Australia Plan’ will improve SME access to these opportunities, injecting $18.1 million over four years from 2023–24 set to help businesses compete for tenders, update the AusTender system, and bolster SME awareness of federal government contracts.
This move, in theory, is very exciting. However, only time will tell if small businesses will be genuinely considered for these opportunities and whether it will have any impact on SME growth in the long-run.
Expert spokesperson: Raghu Rajakumar, CEO and Co-Founder of Eden Exchange
Eden Exchange is an Australian technology platform, designed to be the premier marketplace to list and sell your Australian business completely online. Over the last 5 years Eden Exchange has successfully facilitated over 15,000 business transactions from start to finish, generating over $500 million in business sales and making countless dreams come true.
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