A rear-view facing budget that fails to deliver immediate recovery measures: CCIQ

Tuesday 1 December, 2020

  • NO immediate payroll tax waivers
  • NO new stimulus measures  
  • NO bold reform initiatives to transform our economy

The 2020-21 State Budget delivered today, fails to deliver the immediate measures needed to protect business ahead of the looming economic cliff said the Chamber of Commerce and Industry Queensland (CCIQ).

CCIQ economist Jack Baxter said that despite increased borrowings, there was a missed opportunity to outline any additional immediate measures to assist small businesses over what is expected to be a tough recovery.

“Leading into the election CCIQ called for targeted measures to accelerate businesses to diversify and grow,” Mr Baxter said.  

“Today’s budget included the $500 million for the Backing Small Business Fund which is welcomed as it provides targeted investment to established businesses to invest in capital to expand, scale and grow.

“However,  how many business could benefit from the fund and the details of how it will be accessed, are yet to be fully understood.

“Outside of that though the budget does not provide any further immediate support for small businesses to keep people in jobs and insulate businesses over what will be a critical next six months as JobKeeper ends.

“The information that we received from the budget today has not provided any new or immediate measures to small business.

“CCIQ called for a complete waiver of the COVID-19 payroll tax deferments, as that would have provided businesses some relief concerning the payments that will need to be repaid early in the new year.

“Instead, businesses are now in a situation where the deferments, which are effectively a tax debt, coincide with the recommencement of payroll tax and the cessation of the JobKeeper stimulus. Businesses will struggle, and jobs are at risk. Sole traders also missed out,  which will impact the economic recovery throughout our regions.

“The Palaszczuk Government continues to rely on previously announced measures and hasn’t produced any longer term competitive inducing reform which our economy and business needs.

“The accelerated infrastructure spend of $14.8 B by 30 June 2021 will produce activity, yet requires immediate activation if it is to generate the economic recovery benefits needed for SMEs right now,” said Mr Baxter.

The $6.3B in household concessions, to ease the cost of living burden provides a potential opportunity for small businesses as it creates more opportunities for discretional spending. However, the government did not maximise the opportunity, like the NSW government did with their $100 voucher program to directly stimulate consumer spending with SMEs, stated Mr Baxter. 

“Overall, this budget is heavily focussed on infrastructure, which is only one part of our recovery.

“The immediate lack of support to SMEs will leave a cross-section of sectors exposed to the ongoing challenges in the business environment.

“As it’s crucial to remember business confidence was at all-time lows before COVID, we fear that we are falling back into old habits by remaining negligent to what is truly needed by the small business sector to recover and thrive,” Mr Baxter said.

 

 

ENDS