Guest blog from Julia Askin: the Budget & small business
First up in an ad-hoc series of guest authors on the Australian SBSC Blog is the newest member of our Breadth Partner team - Julia Askin.
You may have already spoken with Julia as the main organising force behind the recent SBSC Roundtables & I'm personally looking forward to hearing her fresh ideas & input on how we can really make the SBSC program thrive.
Cheers & over to you Julia,
Robbie
Federal Budget 2008: 1
Small Businesses: 0
Sydney Renters: -1
I have been an Intern in the Microsoft Partner Marketing Team, mostly helping out with the ISV and SBSC Partner communities, since February this year. I am continuously learning about how both these types of Partners interact in the business and IT markets and of course with Microsoft.
In my university days I always paid a lot of attention to the Budget because its subject matter would no doubt be conveniently tied into a business assignment or essay. I originally thought that this year, a graduate with for once no immediate need to over-analyse the winners and losers of the budget, I would give myself a well-deserved break and not watch the 2008 Budget announcement. But surprisingly this year, as a graduate paying too much rent in Sydney, I did in fact watch the budget to find out exactly how old I would be until I could afford to buy a house (105 years old, if the interest rates keep rising and I keep buying shoes).
I am not a small business expert, but I am an interested small business supporter and hope that understanding the community better will help me provide more valuable and informed input into how Microsoft manages the Small Business Specialist Partner community. In this post I wanted the opportunity to share my relatively uninfluenced thoughts about how the budget will affect small businesses, and what actions should be taken post-budget.
Before I go any further, it is safe to assume that you may have already passed your judgment on how the 2008 Federal Budget affected your business, and you probably can guess my stance on how I think Australian small businesses fared. But do stay tuned a little longer, as further in my post I do suggest a few (hopefully helpful) hints on how to manage post Budget.
Although I feel like I will be renting for life, I felt I did better out of Wayne Swan's announcement than the small businesses of Australia. Steven Ciobo, Shadow Minister for Small Business said that Wayne Swan had taken "an axe" to small business funding, wiping almost $1 billion in funding for important programs to assist small to medium operators particularly in the areas of entrepreneurship and innovation, areas he, and I, think the government should be encouraging. "He’s robbed the engine room of the economy" was his dramatic statement. A bit of a doom and gloom attitude I thought, was he overreacting a little?
I learnt that the heat in this 'engine room' will be cooled by the series of cuts to business assistance programs, including the scraping of the $700 million Commercial Ready program that helps SMEs innovate and commercialise new technology, and there are cuts to the Building Entrepreneurship in Small Business Program, the National Nanotechnology Strategy and the Global Opportunities Program. This is a surprising deletion, as apparently the Australian industry has always struggled with the commercialisation of technological innovations, and the Commercial Ready program played an essential role in the government’s efforts to lift business performance in this area.
This budget also slashed access to a special entrepreneurs’ tax offset and changed the depreciation laws on computer software (which will cost business $1.4 billion over the next four years). Seems like the Government suddenly has a lot of confidence in the ability of small businesses to stand alone without assistance. Kind of like being kicked out of the family home to fend for yourself while you’re still in nappies.
Gregory Will from PricewaterhouseCoopers added to the criticism and said that the budget didn’t offer any support for small business growth into export markets, and that there was no incentive for small business to be more competitive in Australia or overseas.
The government has shown unprecedented confidence and trust in small businesses to implement best practices alone, without direct support, which is flattering I suppose, but out of all major business groups, I would've thought that small business needed particular nurturing - they aren’t called "small" businesses for nothing. It takes an enormous amount of effort and perhaps bravery to start up your own business and it is usually difficult to obtain finance. You would expect that small businesses would receive a lot of support and incentives. How else can small businesses take risks and remain competitive?
Tax was obviously discussed in depth. Reading about tax usually helps me sleep, but this budget's personal income tax cuts should be good for small business. A simpler tax system with the reduction of red tape was announced and the Government will introduce an income test for the entrepreneurs' tax offset (ETO) which will focus the benefit of the ETO towards genuine small businesses.
In summary, I would have to agree with general opinion – that small businesses did get dealt a fairly lousy hand this year, and that if they want to develop and grow, they will have to do so on based on their own initiatives and not those handed down by the government. In the apparent absence of direct help, there are many avenues of support you can explore on your own will. For assistance in export development, contact Austrade or visit the Austrade website for lots of great information and free advice about how to break into the overseas market. AusIndustry is also a handy group to get involved with, as they provide a range of products designed to assist small businesses to become innovative and internationally competitive. Most State Governments also have a small business resources website. The NSW Department of State and Regional Development website also has information about starting a small business, exporting overseas, utilising technology and contains links to up-to-date government resources.
Furthermore there are Business Enterprise Centres (BECs) in many shires/regions throughout the country. BECs are independent organisations that focus on creating local small business opportunities and growth, offering practical assistance in business planning, advice on marketing, budgeting and cash flow. You can find your local BEC here. Small businesses should also network with others in the industry who may be able to offer practical words of wisdom. Keep an eye out for the next Microsoft SBSC Roundtables (probably around November) or join one of the SBS user groups and share ideas with your peers.
And if you own your own house, then don't complain too loudly. I'm yet to decide what the worse budgetary situation is, renting in Sydney or being a small business. Either way, I'd better shelve my 'opening my own shoe shop' idea until the next budget.
Julia
