Invoice lender writes budget ‘wish list’ to Treasurer

The letter reads:

“Dear ScoMo,

“I know you’ve been juggling a lot of balls lately, especially with the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry interrupting your pre-budget preparations. 

“With so much of the Australian 2018 pre-budget talk so far focused on the ‘top end of town’, I’m writing to remind you of the 2.1 million small business owners in this great land of ours, representing 97 per cent of all business.  

“Don’t get me wrong. You’ve listened to us Aussie battlers before and the last two budgets have been kind to small business. But, we are the engine room of the Australian economy and there’s more to be done.

“You are working very long hours, so I’ve taken the liberty of compiling a Federal Budget 2018 small business wish list in case you need an idea or two.”

The wish list includes the following suggestions:

Put measures in place to ensure faster payments to suppliers

“Cash flow is the lifeblood of business and slow payments disproportionately affect smaller businesses, who often lack the financial resources to cover the period spent waiting for invoices to be paid. The government recently backed faster payments, requiring government departments to pay invoices to small business within 20 days. We salute this initiative and hope the government will continue to introduce measures which ensure faster payments,” Mr Charlwood said.

Make the $20k instant asset write-off permanent and not cease on 1 July

The AIF MD wrote: “The continuation of the $20k instant asset write-off in 2017 was big news for small business and a great of sign of government support. We want the government to make the $20k instant asset write-off a permanent fixture in the May 2018 budget. It provides a much-needed shot in the arm for many small businesses and will stimulate the economy.”

Extend the corporate tax cuts announced in last year’s budget

“Australia has not reduced company tax for most businesses since 2000. Small business[es] (with a turnover of up to $10 million) applauded the tax cut from 30 per cent to 27.5 per cent over the 2016–2017 financial year and hope the government will continue to support further cuts in this budget.”

Invest in programs to drive growth and innovation, such as the R&D tax incentive

According to Mr Charlwood, Australia has “a very low proportion of high-growth businesses and government support is needed”, particularly in start-up stage (such as the R&D incentive scheme).

Spend big on infrastructure development which uses small business suppliers

The letter adds: “In the May 2017 budget, the government announced a $75 billion infrastructure spend out to the 2027 financial year. This is good news for small business with positive flow-on effects for the whole economy. We want to see the government commit to this spend in the May 2018 budget.”

Make it easier for business owners to access safe harbour provisions

The SME lender MD goes on to argue that safe harbour provisions, under which a business owner is able to engage expert turnaround specialists to develop a plan that will give a better outcome than liquidation, are “currently inaccessible for most small companies as the consultancy costs are too high”.

“The government needs to come up with a more affordable plan for small business,” Mr Charlwood said.

Small business is drowning in red tape — reduce unnecessary regulation

Finally, Mr Charlwood said: “In the May 2017 federal budget, the government pledged $300 million to reduce the amount of red tape obstructing business. The government must deliver on this pledge. Streamlining red tape makes for a better business experience and helps the Australian economy grow faster.” 

He concluded: “I hope this is helpful. Perhaps you can have a think about it during the boring bits in the royal commission. I’m happy to jump on the phone if you’d like to discuss.”

[Related: Corporate tax cuts ‘will be dumped’, predicts tax expert]