The recently announced Australian Federal Government’s 2023/24 Budget presents a mixed bag of effective fund allocations that can positively impact franchisees and small and medium-sized enterprises (SMEs) while leaving room for improvement in other crucial areas.
Areas where the government has allocated funds effectively and could positively impact Franchisees/SMEs.
One area where the government has allocated funds effectively is in providing relief for SMEs struggling with energy bills. The sharp rise in energy prices has put a strain on businesses across the country. The introduction of energy bill relief measures will undoubtedly provide much-needed respite for SMEs and franchisees, including businesses like PACK & SEND, who will benefit from incentives to invest in energy-efficient technology. These initiatives not only alleviate financial burdens but also promote sustainability, aligning with the broader goals of building a greener and more environmentally conscious economy. $1.5 billion over the next two years will go towards targeted energy bill relief to eligible households and small businesses. Small businesses will receive a total of $650 in bill support, which will undoubtedly reduce a fragment of financial pressure for local franchise and small business owners. The allocation of funds for franchisees and SME cyber protections recognises the pressing need to address the growing cyber threats faced by the sector. For many local franchise and small business owners, cyber risk ranks low on their list of priorities due to the numerous challenges they face daily. This vulnerability undoubtedly places a target on their backs. However, the government’s investment in this area is a welcome step, as it acknowledges the critical role that cyber security plays in safeguarding sensitive data and digital infrastructure. Adequate funding of $23.4 million for the Cyber Wardens program will empower SMEs to implement robust security measures and protect their operations from the increasing number of cyber-attacks targeting small businesses and franchisees. The first micro-credential for cybersecurity in the SME sector will allow these enterprises to shield themselves from the unprecedented rise of digital threats. Additionally, these initiatives enhance the resilience of SMEs, bolster their reputation, and foster customer trust, creating a more secure and stable business environment.
Surprisingly, one of the most outstanding figures to come from the 2023-24 federal budget has to do with aiding SMEs. The Industry Growth Program is set to launch with a funding of $392 million, intended to help small businesses, franchises and startups commercialise their concepts and expand their operations. Further measures mentioned with the budget include tax breaks for local franchises and small business owners, $290 million in cash flow relief for the sector via a $20,000 extension to the instant asset write-off and green energy incentive programs.
The government also seemed dedicated to relieving the stresses of staffing issues for SMEs and franchisees with the 2023-24 budget. The increase to the migration cap and ease of process for permanent residency will ultimately boost the number of individuals seeking employment, providing ample opportunities for small business owners to relieve staffing shortages. The budget also addresses the encouragement of pensioners and mothers back into the workforce.
Areas where the government could have done more or should have allocated funds differently for Franchises/SMEs.
However, while the government has shown effectiveness in certain areas, there are areas where greater attention and funding allocation could have been beneficial for franchisees and SMEs. Mental health support services, for instance, have not received the expected allocation in the budget. Many businesses are still grappling with the aftermath of the pandemic, facing economic pressures, and dealing with the trauma of the past two years. Increased spending in mental health support is crucial to address the well-being of business owners and their employees, ensuring they have access to the necessary support and resources to navigate these challenging times. There was a notable lack of mental health support in this year’s budget, considering the Australia Psychological Society noted the critical shortage of psychologists in Australia, ultimately affecting access to mental health services for many. Xero’s 2023 report on the wellbeing of small business owners revealed 24% of small business owners can’t access affordable counselling and support within Australia. The report, conducted across seven countries, indicated Australian small business owners have the second lowest overall wellbeing, ahead of only the UK. Small businesses cannot run unless there are local franchises and small business owners. More needs to be done to ensure the livelihood and wellbeing of these individuals, considering 94% of businesses within Australia are SMEs. Additionally, rising costs of living, including rent, interest rates, and the overall impact on spending, pose significant challenges for SMEs and franchises. Running a local franchise or small business is not immune to the rising cost pressures that individuals and families experience. Every dollar spent on running a business affects the income earned by business owners, who are often parents and members of the community. Balancing responsible policies that control spending and address cost pressures without pushing families and businesses over the edge is essential. A more comprehensive approach that considers the long-term impact on health, community well-being, and the ability of SMEs to remain competitive is necessary.
What would ensure SMEs and franchises do not get left behind within the cut-throat economy? Liaison and collaboration with industry associations who represent the sector and have accurate understanding of the current landscape for local franchise and small business owners. Unfortunately, while the announcements mentioned above will only provide short-term relief for SMEs, it will definitely be an aid for those doing it tough, recovering from the pandemic and facing the effects of the rising cost-of-living. Regardless, any investment in franchisees and SMEs is a win-win.