Leading non-bank business lender, ScotPac has welcomed federal budget initiatives that will help small and medium businesses improve their cashflow, invest in digital upgrades, and attract apprentices and young workers.
ScotPac CEO, Jon Sutton said the reduction in the GDP uplift rate – used to calculate quarterly PAYG instalments and GST instalments – from 10% to 2%, would smooth cashflow for millions of SMEs.
“We know from responses to the ScotPac SME Growth Index that cashflow is a constant concern for most small businesses, so budget measures to help SMEs to manage cashflow are welcomed.
“SMEs will also welcome the 20% bonus tax deduction for spending on digital assets and training. This targets expenditure that can boost capabilities and productivity, such as laptops, cybersecurity upgrades, e-invoicing and cloud computing courses.
“And new wage subsidies for apprentices and young people will help those SMEs in sectors facing skills shortages.
“At a time when the recovery from the COVID-19 pandemic has been stalled by floods, supply chain constraints and rapidly escalating costs, we welcome budget measures to help Australian small businesses bounce back,” he said.
The key budget initiatives for SMEs to note include:
- The 10 per cent GDP uplift rate that applies to PAYG and GST instalments will be reduced to 2 per cent for the 2022/23 financial year (pending support for legislation).
- $1 billion over four years so small businesses can claim 120% of digital assets and training, like the cost of laptops, cloud computing and other services to help them “go digital”.
- $550 million to cover 120% of the cost of any external staff training courses delivered to employees in Australia or online by providers registered in Australia.
- $2.4 billion to boost apprenticeship uptake. Apprentices in high-demand industries will get up to $5000 in cash payments for the first two years of their training, while employers can access a 10% wage subsidy that will drop to 5% in the third year.
- Petrol excise reduction from 44.2 cents per litre to 22.1 cents per litre for six months from 30 March.
- Businesses with annual turnovers of less than $50 million will be allowed to lodge and pay excise and excise-equivalent customs duty on a quarterly basis, from 1 July 2023. Currently, most of these businesses report monthly, with some reporting weekly.
- Real-time PAYG calculations based on financial performance. Companies that report losses or lower than anticipated profits will get an automatic refund of tax paid from 2024.
Mr Sutton said SMEs are currently facing challenges on many fronts and letting small business get on with running their business must be a priority for any Government.
“Excessive regulation and compliance is a hand brake on small business and the economy. Some of the budget measures to reduce compliance and red tape are therefore welcome to help small business get back on their feet.
“At ScotPac, we understand the pressures SMEs are currently facing which is why we announced last week the extension of our SME Bounce Back Fund which allows business owners to access up to $1million working capital funding through trade finance and invoice finance with the first three months being interest-free.
“The extension until the end of the financial year of the SME Bounce Back fund is a continuation of our commitment to the SME sector,” Mr Sutton said.
ScotPac is Australia and New Zealand’s largest non-bank SME business lender, providing funding to small, medium and large businesses from start-ups to enterprises exceeding $1 billion revenues. For more than 30 years ScotPac has helped thousands of business owners succeed, by unlocking the value from their business assets. Whether it is purchasing stock, investing in vehicles and equipment, improving cash flow or accessing additional working capital, ScotPac can help.
For more information contact:
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