The Australian Small Business and Family Enterprise Ombudsman Bruce Billson has expressed exasperation on behalf of Australia’s small-business community over the delay in passing incentives that are meant to invest and create jobs that expired on Sunday.
“With just days to go before the end of the financial year, Federal Parliament last [Tuesday] night finally passed two pieces of legislation from the 2023 Budget that were announced more than a year ago and [that expired]e on 30 June,” Billson said. “The small-business community is cranky and exasperated about the incredibly slow way these measures have progressed.
“Incentives are designed to encourage a type of behaviour you want to see more of but if there is so little time to act, the purpose and value of the incentive is undermined,” Billson added.
The Australian Government announced last year the Small Business Energy Incentive tax break worth up to $20,000 to support electrification and more efficient use of energy, as well as the new $20,000 threshold for the Instant Asset Write Off for eligible small businesses with a turnover up to $10 million, both of which were stated in the Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Bill 2023.
“We’ve heard from confused small businesses and their representatives that they just wanted certainty but, until a Bill passes Parliament, they cannot know what the final law will say and if an intended investment is eligible,” Billson said. “We’re talking about a small or family business spending $100,000 to get the full value of the electrification and energy efficiency tax incentive. That’s a big commitment, and as recognised by the Government, the tax break may be the critical difference in being able to afford to do this.
“The Parliament is hardly treating small and family businesses with respect by this behaviour,” Billson further stressed. “Small businesses need time to know the announcement has become law, so they can confidently plan in a sure-footed way for important investments that uplift the capacity, the productivity and drive innovation in their business and not be forced in the final days of the financial year when they have so many other deadlines to meet, to rush such big financial commitments.”
The Ombudsman suggested that laws with a time deadline should come with a minimum implementation period of no less than six months from Royal Assent until the time a scheme ends.
“The policy (Small Business Energy Incentive) was designed to encourage small businesses to spend money it would otherwise not have spent, but a lack of certainty over the program may have deterred them,” Billson explained, adding that the limited time available could mean the bonus tax deduction will only benefit businesses that were going to purchase energy efficiency upgrades before the policy was announced.
“We need to give more encouragement for people to turn an idea into an investment and to make that big decision to turn scarce resources into new capability, new equipment, new technology to help with the success and ‘future readiness’ of that enterprise and the livelihoods that depend upon it,” Billson said. “Repeatedly we hear it said that small business is the engine room of the economy yet that engine is being forced to operate below capacity. Small businesses need to be able to trust Parliament to give them enough time to understand changes and with certainty factor them into their planning.”
