MYOB says budget backs SMEs with tax & fuel relief

MYOB says the federal budget includes several measures aimed at supporting small and medium-sized businesses, as smaller firms face rising costs and regulatory change.

The accounting software group highlighted the decision to make the Instant Asset Write Off permanent, the extension of electric vehicle Fringe Benefits Tax incentives until next year, a AUD $10 billion fuel and fertiliser security package, and the return of loss carry back rules for small business.

Those measures were announced against a backdrop of weaker sentiment among smaller companies, according to MYOB's latest Business Monitor survey of more than 1,000 SMEs conducted before the budget.

Half of respondents said the budget would directly influence their investment and expansion decisions. One in four said they would expand operations if meaningful support was included, while 65% said they would delay investment or hiring if their priorities were not addressed.

The budget also lands as businesses absorb changes to superannuation and tax settings. MYOB argued that many firms will need help from accountants and other advisers to understand their obligations and adjust to the new rules.

MYOB Chief Executive Officer Paul Robson said the budget addresses some of the pressures facing the sector.

"Small and medium businesses are managing rising employment costs, new compliance obligations, changing regulatory settings as well as softer economic conditions," Robson said.

He said advisory support will become more important as business owners respond to the policy changes.

"It will be increasingly important for SMEs to seek advice from trusted advisors, such as their accountant, as they navigate these changes and make necessary adjustments. Getting the right guidance will help businesses avoid costly mistakes, reduce disruption, and stay focused on performance and growth," Robson said.

Investment focus

Among the measures highlighted by MYOB, the permanent Instant Asset Write Off was presented as a step that could reduce uncertainty around investment planning.

"Making the Instant Asset Write Off permanent removes some of the uncertainty that has made it harder for businesses to invest with confidence in the past," Robson said.

The return of loss carry back rules would allow small businesses to offset current-year losses against tax paid in the previous two years, leading to potential refunds. MYOB said this could provide added flexibility for firms dealing with uneven trading conditions.

MYOB also said proposed changes to the Capital Gains Tax discount would be watched closely by the SME sector. The treatment of long-term investment and business restructuring will matter particularly for start-ups and growing businesses that rely on outside capital.

Fuel pressure

Fuel costs emerged as the single biggest pressure in MYOB's survey, with 51% of SME respondents identifying fuel as their main cost concern and average fuel costs up about 18% over the past year.

That helps explain why MYOB placed weight on the AUD $10 billion fuel and fertiliser security package, saying it could have implications for businesses in agriculture, transport, manufacturing and logistics.

"Fuel remains the single biggest cost pressure facing SMEs," Robson said.

"A domestic fuel and fertiliser security package of this scale is a meaningful long-term investment into Australian businesses and supply chains," Robson said.

The extension of electric vehicle FBT incentives was another measure MYOB said could help some operators manage fleet costs over time, particularly those weighing a switch in vehicle purchasing decisions.

Confidence strain

Survey findings cited by MYOB suggest many businesses remain cautious about the wider economy. Nineteen per cent of SMEs reported revenue growth over the past 12 months, while 67% said they expect economic conditions to soften further over the coming year.

That caution is feeding into spending and hiring decisions, with policy settings seen as an important factor in whether owners move ahead with growth plans.

"SMEs are resilient, ambitious and ready to grow, but without confidence in the road ahead, the decisions to invest, hire and expand become more challenging," Robson said.

"Tonight's Budget provides some important measures that enable long-term business planning. The focus now must be on ensuring these unlock confidence and investment across a sector that remains central to the Australian economy," Robson said.