The praise for small-business initiatives in the budget has been matched by disappointment among tax professionals about the should-have-beens.
Pitcher Partners national chairman John Brazzale said the business support measures would fail to motivate. He was also among many who criticised the absence of an extension for the popular business instant asset write-off scheme.
“There’s nothing in this Budget that will stand in the way of business but there’s equally nothing that provides a strong incentive for investment or action,” Mr Brazzale said.
“Given the headwinds of renewed COVID cases, flooding across NSW and Queensland, the war in Ukraine, cost of living pressures, labour shortages and inflation, it would have been good for business to receive the right signals to drive confidence.”
Senior manager of tax policy at CPA Australia Elinor Kasapidis said failing to make full expensing permanent was “a missed opportunity”.
“We think that it’s just easier to make things fully expensed in the small business market, it helps with cash flow. It would be good to have that certainty for at least another 12 months,” Ms Kasapidis said.
Others agreed, including BDO that said it “believes in order to achieve the economic recovery the government is aiming for, an additional extension of the temporary full expensing was warranted”.
Both full expensing and a parallel COVID measure, loss carry back, end on 30 June 2023.
Ms Kasapidis said another missed opportunity was government support for business advice, with a voucher to the value of around $1,500 high on CPA Australia’s wish list. She said it would help implement the tax deduction measures for skills and technology.
“It might have been nice to have seen something where they can seek advice about digital adoption or seek advice about what training their staff might need,” she said.
“That’s a really important role that accountants perform, and professional public practitioners do perform, you know, a similar complementary role for business.
“We believe in small business, and we think that they make it’s not so easy for them to get the right advice.”
Xero Australia managing director Joseph Lyons said the businesses that turned to accountants for help during COVID, would now be relying on their accountants again to unpack what measures are relevant and available to them.
He said recent Xero research revealed 37 per cent of small businesses said they rely on their accountant or bookkeeper to help them understand what government policies support or impact their business.
Childcare was a particular concern of the Tax Institute, which said the lack of any measures “to address the unreasonable cost of childcare were a missed opportunity in last night’s Budget”.
It said recent analysis revealed substantial financial disincentives for a family’s secondary earner to return to work where one child is in long day care.
The institute’s general manager, tax policy and advocacy, Scott Treatt, said: “The secondary earner in a family can be taxed at an effective rate, including net child care costs, of more than double the top personal marginal tax rate. This makes returning to work financially impossible for many parents who might otherwise like to.”
In its budget submission, TI recommended supporting low-income families by boosting the subsidy to 95 per cent, irrespective of the number of children in the family.
“No-one should be making career decisions based around the rate or effective amount of tax (including childcare costs) they would pay,” Mr Treatt said.