The budget winners and losers
With very little extra money for innovation and the lack of any firm commitment to emerging companies, it’s tempting to feel that last night’s budget was a damp squib for start-ups.
However, there were a few measures unveiled by treasurer Wayne Swan that will aid certain types of new businesses. For others, the picture isn’t quite so rosy.
So, who are the main budget winners and losers? We run through the entrepreneurs who woke up praising, or cursing, Swan this morning.
The decline of Australia’s manufacturing base has been a long one, but the Government hasn’t given up hope on the sector.
$34.4 million was dished out in the budget to help manufacturers compete in global markets, with special advisers to be employed to push the credentials of small Australian suppliers to large international buyers.
The lack of detail on the carbon price restricted Swan in the levels of investment he could promise the renewables sector, although he did throw a few morsels in the direction of green start-ups.
A new venture capital fund will offer $100 million over the next 20 years to help drive solar, wind, geothermal and wave energy innovation. Granted, it’s a tiny amount given the Government’s ambitious renewables target, but hopefully it’s an opening salvo for further funding.
Much has been made of the Swan’s “carrot and stick” approach to getting stay-at-home parents and the long-term disabled back to work, but there is some encouragement for home-based entrepreneurs.
Single parents will get to keep an extra $3,900 a year under the Newstart Allowance from 2013, while $103 million has been set aside to train and support single parents. This could act as a small, but significant, prod for stay-at-home parents to consider starting up a business.
Employers lacking skilled workers
Skills and training is very much the centrepiece of the 2011 budget and start-ups that struggle to find suitable staff will welcome the extra help.
An extra 130,000 training places will be created, $200 million will be spent on mentoring apprentices and businesses will be given incentives to take on the long-term unemployed. With unemployment set to fall to 4.5% next year, the fight for talent is set to get even fiercer.
A large disparity still exists between regional and urban-based start-ups, but the budget has offered some solace for rural businesses.
$4.3 billion will be spent upgrading regional infrastructure, with $29 million earmarked to grow regional centres and cut small business red tape.
With the Australian dollar at an all-time high, Swan’s budget was the perfect opportunity to offer exporters a much-needed leg-up.
Alas, it was an opportunity missed. There was no extra funding for the Export Market Development Grant Scheme, while the budget of Austrade was actually trimmed.
Despite Swan’s lofty talk of taking advantage of the “Asian century”, there was precious little in the budget for start-ups that sell to overseas markets.
Despite the Government’s instance that small businesses are the “engine room” of the Australian economy, there was nothing in this budget to spawn greater numbers of new SMEs.
There were no new start-up incentives, no funding boost for bodies such as Commercialisation Australia and no measures to make it easier for start-ups to gain funding and mentorship from third parties, aside from the extension of the Government’s own Small Business Support Line.
Start-ups without a car
A headline policy in the budget is the decision to offer businesses a $5,000 tax write-off for vehicles.
This is all well and good, but many start-ups don’t rely on a car. Even those that could do with a vehicle are faced with the significant cost of purchase before the offset applies.
The budget revealed stricter controls on charities. An Australian Charities and Not-for-profits Commission will be created by next July as part of a set of national regulations for the sector.
There was only one measure in the budget relating to trusts – the crackdown on allocating income to children.
The measure, which aims to stamp out the ability of trust owners to stream $3,333 tax-free to their children aged under 18, is designed to cut down on tax minimisation.