Lars Leber, Vice President Australia, Emerging Markets & Global Expansion, Intuit
The Federal Budget is always an important moment in the small business calendar, but operators and advisors will pay particularly close attention when Treasurer Josh Frydenberg delivers his speech on Tuesday 11 May. In pre-Budget announcements and in the Treasurer’s speech they will expect the government to set a course for post-pandemic recovery.
Small business would like to see the continuation, and preferably an acceleration of the Australian Government’s deregulation agenda. This would include anything that reduces the compliance burden, including how they communicate corporate returns, notices and other filings.
The key here is to make these more closely resemble normal business processes. That’s why Intuit is working with public and private sector partners including the Australian Bureau of Statistics to reduce the burden of compliance for small businesses and streamline access to government services and information requests.
While artificial intelligence (AI) isn’t a technology that too many people would associate with small business just yet, many of them are already using it every day in tools like the QuickBooks Cash Flow Planner. That’s been more important than ever during the challenges of the past year. The range of funding initiatives to support the Government’s forthcoming AI Action Plan will help build Australia’s AI capability to grow the economy, support industry competitiveness, create jobs and improve lives. In particular, the National AI Centre will help address some of the barriers that many small businesses face in adopting and developing AI to grow their business.
We welcome the announcement by the Prime Minister of $12.7 million to provide independent advice to Australian small businesses to help them build their digital capabilities. This is a positive step in encouraging small businesses to accelerate their move to digital enablement. As the Prime Minister said, “Every business in Australia is now a digital business.” We’ve seen during the pandemic that those that had already committed to digital were better equipped to come through the crisis because they could dial up online sales and delivery services. That’s been one of the most important learnings and we must capitalise on it.
We’ve seen encouraging signs of this around the world. The US Small Business Administration tripled funding for its State Trade Expansion Plan (STEP), helping small businesses reach global customers during the pandemic. Singapore’s Digital Resilience Bonus provides additional support for small businesses that develop new digital capability.
More than simply telling businesses to ‘go digital’, rewarding businesses for digital investment is going to be a vital strategy in our economic recovery. The Victorian Government’s successful and extended Small Business Digital Adaptation Program offers rebates for those investing in a wide range of products and services, from business management tools to website upgrades. It would be encouraging to see the Federal Government offering further incentives.
The Government has also announced it will invest $15.3 million to increase awareness of the value of e-Invoicing for business and increase adoption. The Federal Government has already committed to processing 80 per cent of invoices electronically by the end of the financial year, moving to 100 per cent by 30 June 2022. Treasury and the ATO have received funding to improve business e-Invoicing awareness and adoption to encourage business following this lead, which is likely to start through utilities, telcos and other suppliers with broad reach.
The Australian Taxation Office estimates that it costs about $30 to send a physical invoice and almost as much via email. But an e-invoice, which travels directly between the financial systems of buyers and sellers, is three times cheaper.
It also reduces the risk of fraud, which the Australian Competition and Consumer Commission estimates cost businesses $132 million in 2019. But most importantly, it means small businesses get paid more quickly, relieving the worries associated with cash flow issues.
While the mood is positive in Australia as we approach the Federal Budget, current events in India are a sobering reminder of how fragile our COVID-19 recovery is. We continue to see isolated cases of community transmission here and we can’t take anything for granted.
But small business owners will be encouraged by the Treasurer’s pre-budget commentary, which promised no “sharp turns towards austerity”. His biggest priority looks to be moving closer to full employment.
So it’s worth remembering that small businesses employ about 4.7 million of the nation’s workers, making this sector the country’s largest employer according to the Australian Bureau of Statistics. Fuelling small business investment in technology will position accountants, builders, cafés and many other small businesses to support wider economic recovery.
