Federal Budget 2017

There are around 2 million small businesses operating in Australia, employing 4.8 million people, almost 50% of the nation.

Queensland is home to almost 20% of small businesses in Australia, with 406,000 small State of playbusinesses employing around 43% of the private sector workforce. SME’s also make up 99% of all businesses in Queensland, contributing around $100 billion to Queensland Gross State Product.

With these staggering figures in mind, supporting small business success is critical to maintaining the overall health of Queensland and Australia’s economy.

The 2017-18 Federal Budget represents the perfect opportunity for the Australian Government to introduce measures to kick-start the small business economy in a time of extraordinary transition.

To this end, there are five key priorities that the Chamber of Commerce and Industry Queensland believes the Federal Government must address in the 2017-18 Budget to support small businesses to grow, invest, and employ. 

PRIORITY 1: TAX REFORM

Australia’s tax system faces several challenges, including technological change, an ageing population and increased mobility of investment, all of which make the revenue from traditional tax bases more volatile. While the economic environment has changed substantially, Australia’s tax mix has remained relatively unchanged since the 1950’s. Coupled with inefficient State taxes, Queensland businesses consider the tax system to be outdated and a brake on economic growth.

SMALL BUSINESS BUDGET AGENDA

  • Accelerate the reduced company tax rate from 10 years to 5 years for businesses with a turnover of up to $50 million.
  • Extend the $20,000 instant asset write-off initiative for a further 3 years.
  • Leadership on national tax reform to address impending revenue shortfall and to tackle the fiscal deficit.
  • Increase pressure on multinational companies for tax compliance by further strengthening the Government’s Multinational Anti-Avoidance Law powers.

WHAT THE BUDGET DELIVERED 

  • Extend the accelerated depreciation by 12 months allowing small businesses to immediately deduct purchases of eligible assets under $20,000 until 30 June 2018.
  • Lowering business tax threshold for businesses with a turnover of $50 million or less, from 30% to 27.5%.
  • The government is further tightening laws to restrict multinationals using corporate structures to avoid paying taxes.

 

PRIORITY 2: WORKFORCE SKILLING

Unemployment has been steadily rising in the past few years, particularly across Queensland’s regions. Yet at the same time, employers are finding labour and skills shortages a challenge to business growth. CCIQ believes more needs to be done to ensure businesses can employ the workforce required to meet business needs. To achieve this, Australia must have a skilled workforce, and investment in education and training must ensure people acquire the skills our future economy needs. Together with a robust skilled migration program, Australia’s education and training sector needs continual improvements so we can achieve better job outcomes, stronger employment growth, higher productivity and increased competitiveness

SMALL BUSINESS BUDGET AGENDA

  • Recommit to full funding of a new National Partnership Agreement focused on apprenticeships, enabling all governments to work together to deliver a national apprenticeship system that meets the needs of industry, young people, and workers wanting to change industries.
  • Ensure employers, particularly those in regional areas, can continue accessing skilled workers through the new temporary skilled migration visa where skilled labour shortages occur.
  • Targeted promotion and education for small businesses around the benefits of the Youth Jobs PaTH program, which aims to address the rising youth unemployment rate.

WHAT THE BUDGET DELIVERED

  • From March 2018 businesses sponsoring foreign employed workers will be required to pay into the Skilling Australians Fund to upskill Australians from March 2018.
  • $1.5 billion over four years from 2017‑18 to establish a permanent Skilling Australians Fund in regional and rural areas.
  • Support for regional students in developing real work skills through the creation of six new community-owned regional study hubs.
  • $60 million over two years to mentor 45,000 apprentices and trainees particularly in industries where there are skills shortages or undergoing structural change.
  • Provide $24 million over four years to establish a Rural and Regional Enterprise Scholarships program to improve educational attainment, skills development, and employment opportunities for rural and regional students in STEM.

READ OUR THOUGHTS ON WORKFORCE SKILLING CONDITIONS

READ OUR THOUGHTS ON THE TREASURER'S CLARIFICATION OF TRAINING REQUIREMENTS

PRIORITY 3: INFRASTRUCTURE INVESTMENT

The Federal Government alongside the independent statutory body, Infrastructure Australia, has refocused on a strategic, long-term approach to infrastructure planning and delivery. While this means significant improvements to how projects are prioritised, assessed and funded, there is still much work to do. Public-Private Partnerships and similar agreements between industry and government need to be streamlined and made more attractive to investors, which includes enhancing the processes around the Northern Australia Infrastructure Facility which has been criticised for delays in assessing proposal and is yet to lend any funds.

SMALL BUSINESS BUDGET AGENDA

  • Increase the productive debt of the Federal Government through greater infrastructure investment into projects identified in Infrastructure Australia’s Priority List report.
  • Accelerate the roll out of ‘City Deals’ across the country, particularly for regional cities in Queensland who are experiencing challenges in the transition post resources boom.
  • Fast track the release of available funding under the Northern Australia Infrastructure Facility (NAIF) Fund through an improved project assessment process.
  • Prioritise the roll out of the NBN, particularly in rural and regional Queensland, where businesses currently experience unreliable internet connection.

WHAT THE BUDGET DELIVERED

  • $10 billion National Rail Program to deliver rail projects and better city-country connections
  • $23.5 million over four years from 2017‑18 to support delivery of the National Cities Agenda.
  • $57.2 million targeted road infrastructure projects that will improve the resilience and productivity of the northern cattle supply chains.
  • $231.5 million for infrastructure projects that are essential to the movement of people and freight in the regions.
  • A national $472 million Regional Growth Fund to help communities take control of their economic future.
New funding announcements
  • The Melbourne to Brisbane Inland Rail Project will be funded with $8.4 billion provided by the Australian Rail Track Corporation.
  • $844 million to upgrade Queensland's Bruce Highway, with $530 million for works from Pine Rivers to Caloundra.
Additional funding
  • $45 million in additional funding for the Walkerston Bypass upgrade in Queensland, bringing the total Government commitment for the project to $120 million.
  • $6 million in additional funding for the Mt Lindesay Highway upgrade in Queensland, bringing the total Government commitment for the project to $16 million.

READ OUR THOUGHTS ON WHAT THE BUDGET NEEDED TO DELIVER FOR QUEENSLAND INFRASTRUCTURE

PRIORITY 4: ENERGY PRICING

Rising operational costs from successive electricity price hikes because of over-regulation, duplication and mismanagement in the energy system has undoubtedly contributed to an increasingly difficult operating environment for small businesses. While steps have been taken to improve the nation’s energy policy, particularly around modernising the National Electricity Market, more can be done to streamline and remove much of the regulatory complexities on energy to bring price relief for small businesses.

SMALL BUSINESS BUDGET AGENDA

  • Undertake regulation reform to streamline processes and avoid duplication, inconsistencies and competing agendas.
  • Harmonise energy and climate policy across Australia that puts downward pressure on energy prices.
  • Sustainably increase gas development to ensure domestic users have access to affordable gas supply.
  • Introduce tax deductions for investments in renewable energy assets for small businesses.

WHAT THE BUDGET DELIVERED

  • Australian Competition and Consumer Commission investigation of retail gas and electricity market competition.
  • Examination of the constraints on increased gas supply on the east coast of Australia.

PRIORITY 5: SME GROWTH & INNOVATION

Businesses understand that innovation is essential to their survival and growth, and the Federal Government is well positioned to pull the right levers and provide the tools needed for businesses to innovate and grow. Small businesses currently face several barriers to innovation, including access to funding, access to a skilled workforce, complex government procurement processes and ineligibility for grants as they are often targeted towards larger companies. Government programs should support incremental innovations in already established small business when changes are made to production, services and/or processes - no matter their size or what industry they are in.

SMALL BUSINESS BUDGET AGENDA

  • Streamline tourist visas to further boost Australia’s tourism industry, with funding from the Government directed at providing greater support for the regional areas of Queensland.
  • Encourage competition in Government owned services to improve efficiencies and lower costs.
  • Extend the ‘Accelerated Depreciation for Small Business’ scheme beyond 30 June 2017 to reinvigorate small business capital investment.
  • Increase the number of places available under the New Enterprise Incentive Scheme (NEIS), which will assist young entrepreneurs in starting up a small business.

WHAT THE BUDGET DELIVERED

  • $300 million over two years to establish a National Partnership on Regulatory Reform (NPRR) with the States and Territories to remove regulatory restrictions on small businesses and competition.
  • National Competition Council will receive additional funding of $12.9 million over six years from 2017-18 to assess the adequacy of State and Territory reform proposals and their achievement of reform commitments.
  • Redirect $146.9 million over four years from Indigenous Business Australia to the Department of the Prime Minister and Cabinet to facilitate the delivery of innovative and effective support for Indigenous businesses and entrepreneurs.
  • $7.9 million over four years to the Australian Competition and Consumer Commission to monitor and report on prices, costs and profits in the insurance market for home, contents and strata insurance in northern Australia.
  • $15 million to the Department of the Treasury over two years from 2016‑17 to undertake a small business information campaign to educate the small business community about what programs and support are available to assist them.
  • $9.1 million (including $3.5 million in capital funding) for the simplification of business registration and licensing services across Commonwealth, State and Territory Governments.
  • Refocus of the Entrepreneurs’ Programme to support the establishment of regional business incubators.

READ OUR THOUGHTS ON BUSINESS INNOVATION AND GROWTH

RECOVERY ASSISTANCE

In addition to the core budget measures, the budget also included measured to get Queensland back on track after Cyclone Debbie.

WHAT THE BUDGET DELIVERED

  • The Federal Government will provide $5 million to assist the Queensland tourism industry to recover from the impact of Tropical Cyclone Debbie.
  • Funding of $3.5 million will be provided to the Queensland Government to fund tourism projects in the affected areas, in addition to Queensland’s current allocation under the Tourism Demand Driver Infrastructure program.
  • Tourism Australia will undertake media advertising to promote the continued availability of tourist venues in North Queensland at a cost of $0.5 million. Tourism Australia will also reprioritise $1.0 million of existing marketing investment funds to focus its current international coastal and aquatic campaign on Queensland destinations.