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Many businesses think their financial position will go backwards after the budget although seven out of 10 express confidence in the outcome, an RSM survey finds.
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Business expects to applaud budget, but be worse off
04 May 2023
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About 50 per cent of businesses belief they will be worse off financially or see no change from the budget although seven out of 10 express confidence in the outcome, an RSM survey finds.
Chief executive partner Jamie O’Rourke said the responses showed business had confidence in the government’s tax agenda, despite the challenges.
“The vast majority of respondents have positive expectations for the budget [and that] points to the small and medium-sized business sector being comfortable with the Albanese government’s current approach to tax reform, which has focused largely on the big end of town,” he said.
“With inflation running at 7 per cent and the global economic outlook deteriorating, the federal government has been at pains to say the 2023-24 budget will tread a responsible path to enhance Australia’s sovereign security and economic resilience while not adding to inflationary pressures.
“This doesn’t bode well for new cash injections for businesses or households outside what the government has already promised, such as targeted energy bill relief (with an already announced incentive for SMEs to instal solar panels), and a focus on the disadvantaged.”
The survey found cost of living was by far the top issue, nominated by 44 per cent, while pain-points also included staff and labour issues (38.5), the tax burden (22 per cent), supply chain issues (14.5 per cent), inflation costs (14.5 per cent) and managing margins (9 per cent).
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Tax reform to address these issues was the top response for 37 per cent of businesses, followed by an improved migration system (29.5 per cent), influence on monetary policy (20.5 per cent) and more stimulus packages (12.5 per cent).
“This focus on tax reform is ongoing for business, and the appeal for an improved migration system is timely given the government just announced an increased threshold and new skills assessments for skilled immigrants, along with a faster visa approval process,” Mr O’Rourke said.
Other wishlist items included fresh business investment incentives (19 per cent), reduced spending on services (18 per cent), reduced government debt (13 per cent) and multinational tax reform (6.5 per cent).
RSM Australia’s national tax technical director Liam Telford said the government had already signalled it was unlikely to continue tax offsets or rebates due to end on June 30.
“The future also looks bleak for a range of business stimulus measures that are also due to end on 30 June 2023,” Mr Telford said.
Measures likely to be on the chopping block included temporary full expensing, loss carry back tax offset and the SME technology investment boost.
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