Banking News

Business Reaction to Australian 2022/23 Federal Budget

(26 October 2022 – Australia) The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) Bruce Billson states that the 2022/23 Budget handed down by the new Australian Labor Government will provide welcome capability building, mental health and financial advice support for small businesses and incentives to grow, transform and become energy efficient.

Real GDP is still expected to expand by 3.25 percent in 2022/23 before slowing to 1.5 percent in 2023/24. Unemployment is forecast to rise to 4.5 percent by Q2 2024 and there is a high likelihood of further interest rate rises from the Reserve Bank indicating conditions will remain challenging for some time.

Treasury estimates that inflation will peak around 7.75 percent at the end of 2022, remain elevated at 5.75 percent by the end of H1 2023 and fall to 3.5 percent by the end of H1 2024, confirming SMEs will face sustained cost pressures for the near future.

The Budget includes A$62.6 million over three years for SMEs energy efficiency grants to reduce energy use and lower bills, A$10.9 million in extra funding for the New Access for Small Business Owners mental health support program operated by Beyond Blue and A$18.6 million in Digital Solutions grants for advisory service providers to help small businesses wanting to get online to access high quality, independent advice at low cost.

“For many small and family business owners, their identities are interwoven into their business and the stakes are so much higher than just a job. Many people have invested a lifetime, and in some cases their family home, into building up their business, which amplifies the emotional challenges” Mr Bilson commented.

“Small and family business owners are literally exhausted. They are struggling to make rosters work and keep doors open due to labour and skills shortages; grappling with supply troubles that means critical inputs, goods and services are not always available, on edge about cyber security fears and some are fighting floods and other natural disasters” Mr Billson added.

“Small businesses have a proven track record of lifting our nation. Remember, coming out of the global financial crisis, almost 60 percent of the new jobs were created by small employers even though the sector only accounted for 40 percent of the workforce” Mr Billson said.

“We continue to urge the government to support small businesses and believe energising enterprise can deliver a stronger economy. Small business is a dynamic and fast-growing sector that allows people with an entrepreneurial spirit to pursue their dreams and energising this will help increase the A$438 billion contribution small business makes to the economy.”