Executives share thoughts about the latest Australian federal budget

Josh Frydenburg, Treasurer of Australia

Following the federal budget announcement last week, several executives from various businesses across Australia shared with BusyContinent what they’re satisfied with, what they’re not too happy about, and how the announcements will impact their industries.

Bruce Macfarlane, CEO and Director, Energy Action

“The federal government is playing an important role in providing a policy framework and industry guidance around emissions reduction, both of which will be key drivers for companies striving to achieve Net Zero – and tonight’s announcement that Australia is on track to exceed our 2030 target reiterates this progress and commitment,” he said.

“However – it’s not enough. Energy Action’s research shows that only 20% of businesses have set a Net Zero goal. And of those businesses that have set a goal, only 20% have actually started taking steps to achieve it. Ultimately, businesses incur a cost to achieve Net Zero, and need a way to recover this cost without passing it onto their customers.”

“Unless the gov’t incentivises businesses on the path to Net Zero, similar to the standards announced by the UK Gov’t in April 2021, the status quo will continue,” he added.

Tom Karemacher, Vice President of APAC, Procore

“It’s great to see the government hit a new record of over $120 billion in overall spending on new and existing infrastructure projects. It comes at a time where investment and optimism is needed in construction, following the hit the industry took during extended pandemic lockdowns, compounded by ongoing skills shortages and increased materials costs,” he said.

“The government plays a significant role in supporting and stimulating the industry, so it’s encouraging to see these initiatives, even though it may take time to feel the benefits.”

“In February 2022, YouGov surveyed 314 Australian construction leaders on behalf of Procore. Around 32% said the construction industry is suffering from a ‘brain drain’, and it is hard to compete with other industries for good employees. Furthermore, 51% said that the government should provide more support to upskill local construction workers,” he added.

“It’s encouraging to see the federal government pledge $2.8 billion to boost apprenticeship uptake and employee retention. This should help secure a healthy pipeline of skilled talent entering the construction industry, which will in turn support continued economic growth.”

“The key will be augmenting the new and existing labour force with the right technologies to improve quality, productivity and profitability, with 47% of Australian construction leaders surveyed by YouGov believing that technology is critical to improving build quality.”

Joseph Lyons, Managing Director – Australia & Asia, Xero

“Xero, the global small business platform, has welcomed the Federal Gov’t 2022 Budget focus on increasing the skills and digital capability of Australian small businesses,” he said.

“Treasurer Josh Frydenberg has offered small businesses a targeted economic roadmap that also recognises that those with higher digital and skills capability perform better,” he added.

“The budget seeks to address the economic risk of consumers shutting their wallets as a result of concern about the state of the economy. Continuing economic growth and closing the capability divide has the potential to spur innovation and productivity among SMBs.”

“We welcome the measures announced to support SMBs to digitise and upskill. We are pleased to see digital service providers recognised, alongside tax practitioners, as helping SMBs go digital. As a global SMB platform, we have observed that tech-focused gov’t measures introduced in other geographies have helped SMBs recover from the pandemic.”

“Delivering a $120 tax deduction on every $100 spent on technology, such as cloud computing, cyber security and web design, will provide small businesses with access to better tools and services. This should help spur business and job growthin the process,” he added.

“Xero Small Business Insights research shows that highly digitised SMBs outperformed their peers in recent years; technology incentives can help more see these benefits.”

“Recent Xero research also found one third of small businesses surveyed (33%) believe a cash rebate or grant to spend on technology would help them use digital tools in their business, indicating these measures could bring a welcome tech boost,” he further commented.

“But the Business eInvoicing Right was a noticeable omission from the Budget despite its broad-reaching potential; the adoption of eInvoicing could generate savings of $28 billion.”

“We welcome the addition of $5.6m committed to the Fair Work Commission to establish a new dedicated SMB unit. Combined with the previous announcement to invest in the Modern Awards Pay Database and other measures on the Attorney General Regtech Roadmap, we foresee a simpler, fairer and more digitised industrial relations system for small businesses.”

“The budget is a positive for SMBs to harness the opportunities of a digitised operation.”

David Price, Global CEO, BizPay

“This year’s budget has been focused on the rising cost of living, and rightly so. However, any solutions to alleviate the individual’s living costs will be fruitless if the rising cost of operating a small business is not also addressed. At its core, the cost of living compares wages with standard expenses, and both of these factors rely upon the financial sustainability of SMBs.”

“Small business owners are feeling the rising costs of utilities, resources, and products, and government support is imperative for the survival of many businesses,” he added.

“Recognising the essence of technological innovation for a steady economy, the 2021-2022 budget promised an increased investment and commitment to Australia’s technology sector and start-ups. This year’s budget needed to reaffirm that commitment because Australian businesses will be left behind without a constant push and prioritisation on investment.”

“The gov’t needs to throw more support behind R&D and innovation so that businesses invest in tech and embrace the digital frontier. We encourage the growth of digital skills and incentivisations for start-ups to begin a long-term commitment to innovation.”

“Strong tech talent is pivotal in the fintech sector, and we’ve not yet found a globally competitive answer to the problem. It’s great to see some progress from both sides of the political fence, but we still have a long way to go to deliver the talent we need today, let alone drive the growth the industry wants to achieve over the next five years,” he said.

“Australia has the potential for a booming fintech sector, but we need to create an environment that cultivates and promotes talent. There are three key areas that we’d like to see the gov’t commit to growing, in order to adequately address the need for tech talent.”

“These areas are programs that address the lack of diversity, particularly that of women in finance; mid-career support so that we retain talent; and a push acknowledging the need for skilled migration. The answer to the talent shortage is turning attention away from a sole focus on the entry-level barriers, toward a full-career view,” he concluded.

Jonathan Perumal, Country Manager, Safeguard Global

“We all know that the Australian economy’s most precious resource is our people,” he said.

“Equally, the most valuable assets in Aussie companies are their people. Growth, innovation, and success rests in the ability to bring the best talent onboard – and right now, this is something Aussie firms are struggling with. While the skills shortage pre-dates the pandemic, the current environment has exacerbated this challenge across many key industries.”

“It’s pleasing to see the gov’t prioritise skills reform in this year’s budget, including an allocation of $3.7bn towards a new National Skills Agreement for jobs of the future and $500 million in tax relief for small businesses investing in upskilling their employees,” he added

“It will take time for the industries that are most under pressure to feel the benefits of this funding. Firms are still frantically seeking new ways to recruit the skilled workers they need.”

“Accessing skills in international markets will not only be a key survival mechanism for Aussie businesses looking to plug their talent gaps – it will also create a foundation for them to enter new markets by building a global team with employees in key locations,” he further said.

“The Australian Industry Group (AIG) found that 73% of Aussie CEOs expect to have difficulty finding and retaining skilled labour in 2022. Companies open to hiring globally in compliant and efficient ways, and that adapt to the new expectations of a distributed workforce, will be well-positioned to continue their growth and resilience to the talent shortage,” he said.

“When the government’s new skills initiatives are fully up and running, they will have more profitable firms that can hire Aussies and provide exciting opportunities to the workforce”

Ajay Unni, founder of StickmanCyber

“In tonight’s budget, federal treasurer, Josh Frydenberg, announced two cyber security measures. For every $100 that small businesses spend on cybersecurity, they will receive a $120 tax deduction. And the Australian government is making a $9.9B investment in its own cyber capabilities, including a new cyber and critical technology centre,” he commented.

“We are not surprised to see this investment, given the increase in cyber attacks. But we’d like to see it go further so the measures in place to secure our digital world are even half as considered as the measures in place to protect our physical health and secure our borders.”

“Without helpful mandates or more defined guidance on how the funds can be used by Australian businesses, businesses are playing with fire,” he further commented.

“We don’t need another pink batts situation – businesses need help to understand how to best direct their cybersecurity investments as critical compliance and protection for their business. For example, downloading new anti-virus software isn’t going to cut it!”

“Australian businesses need to act now to ensure their cyber security posture is in place and up to date to ward off any potential attacks. It’s not a matter of if, but when. And now the federal government has provided an incentive to encourage businesses to proactively protect themselves and their customers, rather than waiting for something to go wrong,” he said.

“Aussie businesses are under siege from cyber attacks with the Office of Australian of the Australian Information Commissioner (OAIC) noting that 55% of the 256 data breaches from July to December 2021 were a result of malicious attacks, and 68% of those cyber attacks.”

“We have security systems and controls for car manufacturing, appliances and home construction. The same measures need to be applied to anything digital that goes live with systems and controls in place that stops the risk of public data being exposed,” he concluded.

Ben Kearney, CEO of ALNA

“The national peak body for lottery agents and newsagents, Australian Lottery and Newsagents Association (ALNA), is glad small businesses will receive some sound relief and support. While last night’s budget did not contain any ground breaking initiatives to really propel small business forward, it did include measures to lessen the burden,” he said.

“There is great expense involved in keeping a business alive for even a day, from commercial leases or mortgage payments for a premises, through to staff, stock, utilities, software, and more. And while small businesses are constantly expressing their desire to further embrace the digital economy, the cost of doing so after the hits of the pandemic, can be limiting.”

“So we are pleased to see the 120% deduction available for the cost of digital adoption and employee skills training. These are excellent real incentives for small businesses to retrain and to embrace tech to take the next step towards their e-commerce and efficiency goals.”

“We recently wrote to the Small Business Minister, Hon Stuart Robert MP, looking for relief on fuel excise for our members, particularly newspaper distributors being hit hard by fuel prices.”

“The government’s halving of excise for fuel will give them immediate tangible relief and give them back their money so they can better invest in other aspects of their businesses. We do note that the peeling back of this initiative possibly after six month will be a challenge, and one that we hope there will be industry consultation on,” he further commented.

“The investments in regional communications and infrastructure will have meaningful impacts over time for our member businesses operating in regional areas and will support greater employment in the regions. A significant missed opportunity in this budget was a commitment to make least cost routing of small businesses payments mandatory,” he said.

“This is something that we have been seeking because we know the impact it will have on the cash flow of SMBs. Where merchants can have control of payments routing they can reduce costs. Protecting this is critical to reduce inflationary pressures on payment costs.”

“We were also looking for a national strategy and leadership on enforcement to stamp out the rampant illegal retailing of illicit tobacco products that have been getting out of control across Australia. This growing issue sees retailers lose sales, but it also sees our nation lose the revenue that would have otherwise been gained in tobacco excise,” he said.

“Finally, ALNA is pleased to see the dedicated mental health service for small business and the small business debt helpline program, and hope that there is an increased awareness that this is available. The pressures of owning a business are immense, and small businesses like newsagents are the lifeblood of the Australian economy,” he concluded.

Steve Orenstein, CEO of Zoom2u and Locate2u

“The reduction of the fuel excise goes beyond helping households – it will help drivers as well. Stakeholders should expect this relief to be passed on as a reduction in increased freight charges. The 20% deduction to support digital uptake for SMEs is a vital step in helping SMEs future proof their businesses and become competitive in global markets,” he said.

“The opportunity to grow a business, while navigating constant challenges, such as world events, price increases, flood damage, and the pandemic, comes with intense pressure.”

“So I am pleased to see attention given to mental health support for business owners and also the small business debt helpline program. I’d like to see the mental health support for business owners increase, given the continual strain that they face,” he further commented.

“It was disappointing that the instant asset write off scheme hasn’t been extended, as that would have been to help businesses to continue to invest in their stability and growth.”

“We are also disappointed to see that more isn’t being done to move Australia faster in reducing our carbon footprint. Without a rigorous approach from the government in addressing climate change, businesses are bearing the cost of responsible action,” he said.

Liz Ward, co-founder and CEO at Navii

“The Morrison Government’s budget announcement on a 120% tax deduction for small businesses to upskill in digital makes complete sense.  This is a compelling incentive for business owners to invest in taking their next steps to better business performance.”

“During our conversations with thousands of SMB owners who we work with delivering support to develop digital strategies and use digital tools better, a common challenge we hear from them is that they don’t have the expertise in their team to fully capitalise on digital.”

“This is massive risk to their business being sustainable as their customers are more tech savvy than ever before. COVID has accelerated a rapidly-changing online marketplace.”

“The digital confidence and expectations for quality online customer service have shot up in the last two years. This is evidenced through statistics, such as online purchasing in Australia growing by 23.4% over the previous year (Australia Post),” she further commented.

“Businesses must act now. It’s time sensitive and critically important that they implement the expected digital strategies, tools and know-how to meet their customers’ needs,” she said.

“If they don’t, their competitors will, and they’ll be left behind, invisible to their target market and customer loyalty will be greatly diminished in the process. This incentive will be well received to more than offset business investment in expert advice, training and support to assist them on their digital transformation journey,” she concluded.