- Prudent spending decisions but no long-term vision
- Federal Government strikes right balance on cost of living relief and limiting inflation
- Not enough support for small businesses.
Federal Treasurer Dr Jim Chalmers’ Budget 2023 is sensible but fails to seize long-term opportunities, according to Australia’s leading professional accounting body, CPA Australia.
“Overall, we’re pleased with the prudent approach to tackling economic challenges. The government has shown admirable restraint on spending in the Federal Budget,” CPA Australia Senior Manager Business and Investment Policy Gavan Ord said.
“Unfortunately, we’re still missing a long-term plan that drives a sustainable and economically certain future for Australia. This was billed as a ‘two-part’ budget to get us back on track and ready to move forward. The government has tackled current challenges but failed to reach for economic opportunities.”
- $4.2 billion surplus in 2022-2023 before returning to deficits
- $14.6 billion cost of living plan
“This isn’t an austerity budget, however it shifts the dial a few degrees towards tightening fiscal policy. That’s appropriate for where we are in the economic cycle.
“There are many challenges facing households and businesses in Australia. A sugar hit of spending for middle income households might’ve been politically popular but could have made inflation worse. Today’s targeted relief for the most vulnerable, such as JobSeekers, pensioners and single parents is the right approach.
“The government now needs to evolve its thinking from providing support to growing productivity. A clear strategy provides businesses the confidence they need to invest and prepare for the future. We need a detailed plan to allow all businesses to prepare for significant change.”
- $314 million Small Business Energy Incentive to switch to efficient energy sources
- $392.4 million Industry Growth Program to support start-ups
- $23.4 million “Cyber Wardens” program to boost small business cyber skills
“Encouraging small businesses to improve their energy efficiency and sustainability is pleasing. Unfortunately, tax initiatives with short lifespans often take too long to pass parliament. We’re concerned these delays could affect the instant asset write-off and energy incentive. A worker shortage and difficulty getting equipment may also see many small businesses miss out. Businesses need a longer runway than one year for measures like these to be useful.
“Small business owners still face an uncertain economic future. Australia’s small business owners are much older than others in the Asia-Pacific region and far less likely to innovate. The Industry Growth Program will help support innovation albeit it at a low level. We wanted more vision for small business growth and business dynamism.
“We need more targeted capacity building support for small and medium businesses and a renewed focus on entrepreneurship.”
- Temporary full expensing ends
- One year $20,000 instant asset write-off introduced
“The end of temporary full expensing is a missed opportunity in the budget. It should have been made permanent. This would have given businesses long-term certainty to choose where to make capital investments. The $20,000 instant asset write-off is welcome, but it isn’t as generous as temporary full expensing. It’s only for one year and doesn’t provide the long-term productivity benefits that a permanent tax break would provide.
“We would like to see the government have more confidence in its ability to steer Australia into the future. Short term initiatives have been a factor in politics for too long. We want a plan that stretches over multiple terms of government.
“The Federal Government has left major opportunities on the table, including tax reform. Tax reform is fundamental for productivity and economic growth to lift future living standards. With Labor governments in all mainland states and territories, now is the time for the Federal Government to lead on GST, stamp duty and payroll tax reform.”
CPA Australia External Affairs Lead
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