Small business organizations have warmly welcomed the reinstatement of a 120% tax deduction for skills training and digital adoption as a timely incentive for their members that will help them become more competitive and resilient.
The decision to legislate the measures, which were initiatives in the last budget, will allow companies with annual sales of less than $50 million to claim technology or training expenses retroactive to March.
Digital systems were critical and proven for small businesses during COVID, the Council of Small Business Organizations Australia said.
“We know from research by payroll provider Xero that the more digitized a small business was, the more resilient it was to the shocks of COVID-19,” said chief executive Alexi Boyd.
“It’s almost impossible to run a small business today without using technology, whether it’s digital data storage, customer marketing, customer payment services, inventory management, payroll software or just a website and social media channels.
“Encouraging digitalization is key to making our small businesses stronger, more productive and more resilient to future economic shocks.”
She welcomed the bipartisan support for the sector, but said the digital incentive should be complemented by more resources dedicated to fighting cybercrime.
“With increased adoption of technology comes greater vulnerability to cybersecurity threats. COSBOA encourages the government to adopt a program to equip small business owners and their staff with the skills they need to protect themselves against cybercrime,” said Ms. Boyd said.
Australian Small Business and Family Business Ombudsman Bruce Billson agreed digital systems had been vital during the pandemic and said the tax breaks were a welcome boost to growth.
“Small business is a dynamic and rapidly growing sector that empowers entrepreneurial-minded people to pursue their dreams and incentives like this will help increase small businesses’ $438 billion contribution to the economy,” he said.
“Achieving these budget promises will inspire small businesses and family businesses to deepen their commitment to their communities and the economy.
“Digital tax relief will allow them to invest in things like cybersecurity systems, cloud-based services, e-invoicing or accounting software, hardware like laptops, and portable payment devices. .
“For a small business, the cost of staff training can be quite significant, and this deduction will help owners invest in staff development to boost productivity and competitiveness.”
The bill, which is open for consultation until September 19, has also received approval from professional accountancy bodies.
On the eve of the jobs and skills summit, CA ANZ said the move was “a big win” for those already struggling to retain talent.
“I thank the federal government for moving quickly to legislate these proposals because it is something we as a profession advocate for,” said Ainslie van Onselen, CEO of CA ANZ.
“Small businesses are struggling with the ability to retain staff, and this decision will give them the certainty to invest in their people and give their staff clear paths in their professional development.
“This type of investment can make the difference between a staff member staying with one company or deciding to pursue another opportunity.”
CPA Australia CEO Andrew Hunter said the government should act quickly to legislate the measures, which he has been calling for since the election as vital to help SMEs “improve their performance”.
IPA chief technical policy officer Tony Greco said the measures were great for Australia’s lagging productivity, but a downside was their length, with the training deduction ending June 30, 2024 and the digital deduction only working until June 30, 2023.
“Our biggest issue is that these initiatives have a short life cycle and are temporary in nature, which is disappointing once they end,” Mr. said Greco.