Editor’s Note

Comment

SYED SHAH – Managing Editor, Manufacturers’ Monthly

How the SMEs finally come away with the win

BUDGET 2022 saw both wins and losses for industries in Australia. Truth be told, it is hard to please everyone, but for the longest time, budget wise, it looked like SMEs were not given the attention they deserved. Of course, regardless of who the opposition is, there are promises of adjustments for a new budget if elected and also just how many of those will be followed through. Additionally, there might be further funding announcements in the lead up to the election – typical of any ruling incumbent.

The ruling party’s focus was centred on the cost of living with the halving of the petrol excise and extra cash for the low and middle income tax offset (LMITO), among the many announcements.

For infrastructure, $17.9 billion was announced for roads and rail (mostly). Defence had already been a winner prior to the budget with more than $10bn allocated to the nuclear submarine pen development as well as a further $270 billion to be splashed over the next 10 years. Elsewhere, there were incentives for investment in agriculture, medical manufacturing and digital.

For the manufacturing industry, SMEs make up a large portion of it. In this budget, there is funding announced to invest in training and technology – things that are welcome in sectors suffering skills shortages.

With Industry 4.0 in full swing globally, since the first round of the MMI, Australian manufacturers have been given the platform, and the confidence and room to grow in developing “advanced manufacturing” characteristics. The MMI and now the extra funding through skills and training should be put to further good use to support manufacturing projects.

How, one might ask?

Through investment in upskilling in managing advanced technologies and techniques. To stimulate economic growth, there is no need for an expert to let you know that the local industry needs to be modernised. To become genuinely competitive, create long-term, better, higher-paying jobs, increased productivity, most likely less energy consumption and finally economic growth, upskilling is one of the many important steps along the way to getting there.

Therefore, an extra $1.5 billion by the Government has been set aside to hire 100,000 apprentices and trainees in the next year as the government extends its job creation programs. With this program, 50 per cent of an apprentice or trainee’s wage for the first year will be reimbursed to the employer, up to a cap of $7,000 a quarter.

In a CPA Australia analysis preceding the budget, it was also noted that despite Australia’s low unemployment rate, the country is facing real challenges such as labour shortages and supply chain disruptions coupled with weak customer demands. SMEs would be greatly assisted with less red tape to reduce the amount compliance, reduction in costs of doing business and taxes, and most of all, assistance in measures to support hiring and maintaining staff to carry on running the business.

And were the SME community heard? Quite so.

Some of the major announcements included the training boost and small business skills. These include businesses with aggregated turnover of up to $50 million will be able to deduct an additional 20 per cent of expenditure incurred on external training courses provided to their employees. Similar to this is the small business technology investment boost with businesses of a similar size will get help to invest more in advanced technologies to help boost their business in cybersecurity and automated technologies to increase the efficiency of their business.

These tax reforms which should help improve cashflows will be music to the ears of SMEs now that the government has increased tax breaks for them investing in new technology and skills. The reduction in red tape in compliance should be an added incentive to be more courageous in adding more to their R&D arsenal and taking the next step in expanding their businesses.

Last, but not least, SMEs were not the only ones happy at the goodies being given out. In April 2022, Manufacturers’ Monthly’s Endeavour Awards 2021 edition was held in Melbourne to the delight of a sold out crowd. As usual, we celebrated in style and it was about the best and the brightest in the industry, but also took pride in the strength and resilience of the people. Mostly, the attendees expressed their gladness just to be back in a room full of manufacturing professionals after a couple of challenging years.

Read all about it in this bumper edition on page 46.