TRANSCRIPT
Small business owner Eugene Cheng runs six sneaker cleaning businesses across Sydney and Melbourne.
He says he's used to feeling left out when it comes to budget time.
"We don't have a lot of say in it, and therefore we just kind of take it as it comes. There's not a lot to it, and I wish there was a lot to talk about. There isn't a lot to it. To my knowledge, there's a small business tax write off, which is a very interesting thing considering it really does help you if you have that cash to splash. But as the data is showing, a lot of businesses don't have that cash to splash to get that write off. So, if you're cash strapped, how do you spend that money to then get that instant tax write off?"
Specific measures for small businesses have been next to none.
Along with households, they'll get a $325 energy rebate.
And they will have the ability to claim an immediate tax deduction on the full cost of eligible assets costing less than $20,000 for another 12 months under the instant asset write-off scheme.
Mr Cheng says that will do little to help him with the rising costs of doing business.
"Especially coming out of COVID, it's always interest rates going up, interest rates going up. We're finding wages, superannuation going up. It's just harder and harder to retain staff. All the costs of even freight and delivery and everything you see in the store going up. Our ability to charge has not gone up, as everyone's spending power has come down. So small businesses get stuck in somewhat of a bit of a sandwich as we can't increase our prices, but the costs are catching up; and it does make it very hard to continue doing business."
The risk of failure for small businesses rose by 20 per cent in the past year, according to recent data by credit reporting firm Illion.
Food services are among the industries at most risk.
Owner of restaurant One Noodle Pot, Georgina has told the SBS News In Mandarin TV program, it's a tough time.
"It is good to see we have some benefit, but around $300 a year for the business energy. I don't think that's useful for small business. Although we are in a very good location in a shopping centre, but we still need to pay lots of effort and to cover the balance for a lot of the cost. So we are doing it really really hard (tough) at this moment, to make us getting better."
In good news for businesses, it would appear labour tightness is easing – with the number of online job vacancies coming off a 14-year high.
And wages growth is likely to have peaked.
The quarterly wage price index has eased to its slowest pace in a year.
The seasonally adjusted wage price index rose 0.8 per cent this quarter - and 4.1 per cent over the year.
As for what it means for inflation, independent economist Saul Eslake says it depends on the extent to which businesses can pass it onto consumers in the form of higher prices.
"And as demand weakens, which it's expected to do, businesses' ability to pass cost increases onto their customers will accordingly lessen, and that's part of how we get to lower inflation. The other important factor here, however, as the Reserve Bank has repeatedly emphasised, is that wages is only one of the things that determines labour costs for business. The other is productivity. Productivity growth has been abysmal. Indeed for a couple of years, it was negative. Now indeed start to turn around in the second half of last year, and the Reserve Bank is assuming that that trend will continue."
Luke Achterstraat [[Act-tah-straht]] is the Chief Executive of the Council of Small Business Organisations Australia - or COSBOA [[Cos-boh-ah]].
He says the budget was a missed opportunity to really help small businesses, which make up 97 per cent of the business sector.
"Look, small businesses are pretty underwhelmed by the federal budget 2024. There's not a lot in there to get excited about. It's really a status quo budget. We've seen the continuation of a couple of programs, including the instant asset write-off, some energy relief. These are good things, but they do not come anywhere near far enough to support 2.5 million Australian small businesses. Were really the backbone of our economy, who have been doing it tough for a period of time. We really needed to see more than the status quo."
For larger businesses, the budget brings better tidings and the promise of a more competitive market, but the Business Council wants to see more.
The council's Chief Executive is Bran Black.
"But what we need to see, what we really need to see more of is getting the fundamentals right. And the budget doesn't address those issues. So that's tax, that's industrial relations, that's planning reform, that's the regulatory impost in Australia. Those are still major challenges. We need to see governments take on these challenges to ensure that we can safeguard the future. We're also a little concerned as well."
