Budget 2022 – taking baby steps to address SME challenges
By Guy Callaghan, CEO of Banjo Loans
The Labour government’s first budget in a decade demonstrates the current state of flux the Australian economy finds itself in. On one hand, many industries are experiencing high growth with large revenue inflows, while others continue to feel the pain of the last few years’ uncertainty, now compounded by rising costs of borrowing and inflation.
As was clearly communicated prior, this was not a budget stocking full of free gifts, but there are some schemes that will certainly help fund initiatives and measures to support SMEs, such as the $2.4 billion commitment to extending NBN full fibre access to 1.5 million homes and businesses by 2025.
An additional $1.2 billion will be poured into the Regional and Rural Australia Plan to enhance connectivity through faster internet and mobile coverage and improving resilience against natural disasters, including reliable power supplies.
More than 90% of Australian businesses are SMEs, so broader general measures like cheaper childcare and greater paid parental leave will support small businesses by increasing the available workforce to an estimated 37,000 extra workers.
The commitment to modernise education through funding technology, and creating 480,000 fee-free TAFE and community-based vocational education places will go some way to addressing the existing skills gap. No doubt the focus will be for sectors experiencing critical shortage, such as tech and affiliated businesses – allowing them to engage and retain skilled people.
Banjo’s 2022 SME Compass report identified that one in three SMEs had found recruitment difficult over the preceding 12 months. Approximately half of all SME owners were concerned about labour skill shortages in 2022. Even though the boost to the skilled migrant program under this budget is very welcome, it will nevertheless take time to kick in. The hospitality industry can’t really afford to wait, with the busy summer season approaching, and a range of solutions needs to be workshopped with industry reps.
Labour’s broader efforts to increase women’s workforce participation, including the $5.8 million over five years from 2022–23 to support women in science, technology, engineering and maths (STEM), is welcome. The program will boost diversity and allow more working parents, especially mothers, into the workforce – particularly in underrepresented sectors like technology.
As has been well documented there is going to be significant inflation ahead driven by increasing energy prices, groceries and other household goods. This is happening globally due to the war in Ukraine and other factors, so governments only have so many levers to pull. However, the Australian Government’s focus on investment in renewable energy is far-sighted policy and the right approach to bring down prices, as well as creating jobs over the long term. We still have the short-term pain to deal with, but initiatives like small business energy grants will help with growth for businesses struggling with increasing power prices.
Investment in manufacturing to expand our industrial base and regional centres should also have a positive effect. Resulting in job creation in sectors of the economy that greatly need it.
We’re continuing to see too many cyber-security breaches in recent months, so it’s vital the government strengthens its own cyber defences. The new $31.3m investment by the government in cyber resilience and security is important, but may not be enough, especially during this era of massive digital transformation and uptake.
While harsher fines are necessary for any kind of data breaches and loss, it is pivotal to have better funding allocation for digital safety and education. All businesses and their staff need a more sophisticated understanding of cyber-hygiene.
Thankfully this was not a budget that overly pandered to the big end of town. The targeting of multinationals to pay a fairer share of tax was refreshing and welcome – a scheme that sounds good but could be hard to deliver.
Overall, I hope the targeted budget programs will lay the groundwork for a more secure economic future – powered by the private sector – but it will be mixed with financial pain for some in the short term.
Guy Callaghan – Chief Executive Officer, Banjo Loans
Guy Callaghan (pictured) is the CEO of Banjo Loans, a leading fintech SME lender. Guy is a successful business strategy executive with a strong background in business development, relationship management, operational management, and marketing with extensive exposure to the financial services sector.
As an ex-Olympic swimmer, he is driven to succeed, and to help his team achieve their goals. One of his core beliefs is that a business is so much more than just assets or collateral. He is passionate about helping to drive the sustained growth of Australian SMEs by allowing them to access the funds they need to succeed.
