With Labor celebrating a landslide victory in last weekend’s federal election, what’s next for Australia’s small-business owners?
In this article, we unpack what to expect over Labor’s next term and what its policies mean for your business operations.
What’s the upshot?
As we covered in our pre-election breakdowns, neither major party stepped up with game-changing policies for SMEs this election. Key asks from advocacy groups – like meaningful tax reform and deregulation – fell by the wayside.
“Throughout this election campaign, we have seen a lot of tinkering around the edges but nothing that meaningfully changes the playing field for small businesses, which are up against surging rents, power and insurance costs, as well as complex workplace laws,” said COSBOA CEO Luke Achterstraat.
Most of Labor’s big election promises and policy plans will impact small-business owners more in the big-picture and long-term. Take the extra $3 billion for the NBN, for instance – while not SME-specific, it’s a clear positive for the millions of business owners who rely on fast, stable internet to run their operations.
Then there are tax cuts rolling out over the next couple of years, which could drive up customer spending and free up working capital for those SME owners who use personal funds to keep their ventures afloat.
There are also more more SME-specific policies to be aware of, like an extended $20,000 asset write-off, more worker protections like banning non-compete clauses, and energy bill relief for eligible businesses.
The Instant Asset Write-Off (IAWO) will be renewed, but remains at $20k
While the $20k IAWO has been renewed for another year, it hasn’t necessarily been received well by business advocates. COSBOA, for example, has called for the ceiling to be lifted permanently to $150,000.
“For many small businesses, [the $20k IAWO] is not enough,” financial business strategist Mark Waller told ISB. “The risk is that it encourages spending purely to reduce tax, rather than driving genuine business value. Owners should be wary of tax-time pressure and focus on purchases that truly support their operations.”
Support with energy bills and sustainability upgrades
Business and industry experts were more optimistic about Labor’s energy policies, which may lessen some cost burden on SMEs over time.
Sustainable energy solutions provider Avani Solutions is hopeful about Labor’s efforts to decarbonise the energy grid, as well as commitments to lessen the burden on households and businesses.
“Efforts to reduce household energy bills should see energy prices stabilise and come down over time,” said Head of ESG Ian Lieblich.
These efforts include battery subsidies, further rebates for small businesses, continuation of the Energy Efficiency Grants for Small and Medium Enterprises program, and continued FBT exemptions on electric vehicles – which the Coalition had promised to scrap.
Further IR changes could mean more red tape
A big area of concern for Labor recently has been IR. The party introduced a raft of changes in its past term – like the ‘right to disconnect’ and updated award definitions.
And business owners can expect more in this next term, with the reelected Albanese Government proposing a ban on non-compete clauses and some big (and controversial) superannuation changes.
The suite of IR reforms, as well as other changes like cyber security incident reporting, have increased some of the compliance burden on small businesses in recent years.
Business coach Shani Taylor told ISB she’s cautious about the potential red tape burdens of some of Labor’s policies, particularly for sole traders.
“If you don’t have a team or systems to handle the red tape, you’ll spend more time ticking boxes than building a business – and that means fewer solos will survive long enough to scale,” said Taylor.
To minimise the impact of compliance burden, Taylor recommended investing in ways to streamline and automate business operations.
What next?
- Talk to your accountant about how you could be making the most of the renewed instant asset write-off before EOFY.
- Stay tuned for energy efficiency grant openings via the GrantConnect website.
- Review employment contracts in light of proposed IR changes – and/or speak to your lawyer about what they mean for you.
