Industry figures have said the federal budget’s support for SMEs could benefit many businesses, including brokerages.
The Morrison government’s 2022-23 budget has been celebrated by a range of members within the small to medium-sized enterprise (SME) sector, with members of the broking industry outlining they could directly benefit brokers, as well as their clients.
Announced earlier this week (29 March), the latest federal budget offers a range of planned measures to help bolster cash flow, incentivise and support hiring, and provide tax relief for small businesses.
The measures include a reduction in the GDP uplift rate to 2 per cent from the 2022-23 financial year (down from 10 per cent), allowing pay-as-you-go (PAYG) instalments to be calculated on financial performance, as well as a 120 per cent tax deduction on the cost of any technology and training courses spent to upskill staff.
Further, the budget also provides for employers of apprentices and trainees in “priority occupations”, who will receive wage subsidies of up to $15,000 from 1 July onwards.
The executive director of aggregator Connective, Mark Haron, outlined that many of the SME measures could benefit broker businesses.
“Our research tells us that investing in the right technology, and the skills to get the best out of that technology, is a top priority for brokers,” he said.
“With a 20 percent increase in the tax deduction – from $100 to $120 for every $100 spent – for investment in training and technology, brokers could consider investing in their website or cyber security protection or upskilling staff.”
Kirsty Dunphey, the co-founder of the Tasmanian brokerage Up Loans, told The Adviser that the budget has come at an ideal time.
“There’s tonnes of stuff in our business that we actually need to do,” she said.
“I’ve got staff members that have been with me a long time, they’re great at the technical side of loan processing – those sorts of things, but if I want them to be in a position to lead teams, we’ve got to continue to train them on that.”
Ms Dunphey added that the “training side” of these support measures is positive, adding that it’d be interesting to see how these measures play out and what restrictions there are on them.
“Anything that can help the industry become better educated overall is great,” she told The Adviser.
Members of the SME sector have also voiced their support for the budget. The Australian Small Business and Family Enterprise Ombudsman Bruce Billson called the budget “a financial and strategic commitment” in ensuring small businesses are digitally enabled and resilient, with the resources required to be competitive.
Mr Billson celebrated the 120 per cent tax deduction, calling it an “important investment” for the future of an SME, but advised SMEs to keep abreast of their tax obligations as they would need to pay any extra tax owed at the end of the financial year, if their business earnings exceed what is calculated quarterly.
The ASBFEO also cheered the introduction of apprentice wage subsidies.
“This is an effective incentive for SMEs to continue their commitment to taking on new apprentices,” the ombudsman said.
“The cost of apprentices can be significant as they learn the ropes, so small and family businesses will welcome this wage subsidy extension.”
The CEO of business lender ScotPac, Jon Sutton, affirmed a similar position, stating that the GDP uplift rate reduction would smooth cash flow for millions of SMEs.
He added that SMEs will also “welcome the 20 per cent bonus tax deduction for spending on digital assets and training”.
The Council of Small Business Organisations Australia CEO Alexi Boyd welcomed the investment in the digitisation, stating: “Small businesses are particularly vulnerable to cyber threats and need assistance to understand and engage with implementing better digitisation practices.
“We hope that this encourages more small businesses to digitise not only their processes but their cybersecurity, their infrastructure, and their software.
“However, small businesses better get their skates on – there’s only one year to access the deductions, and some investments affected by supply chain issues will take longer to access.”
[Related: Federal budget tentatively welcomed]