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Government supports SMB growth

Government supports SMB growth

SMBs to benefit from tax incentive changes and Australian jobs package

Australian SMBs will be given stronger support to grow, improve productivity and achieve international competitiveness as part of the Gillard Government’s A Plan for Australian Jobs package.

The government said, in a statement, that it would also be the biggest beneficiaries from changes to tax incentives for research and development (R&D) as there would be more money available to support new areas of innovation in Australia.

Minister for industry and innovation, Greg Combet, said the move to introduce the new package was to encourage Australian entrepreneurial small businesses and start-up firms to expand into mid-sized firms that can compete internationally.

“Australia has a good track record in starting up new businesses but we need to ensure that our small businesses can take advantage of opportunities to grow, collaborate, adopt innovative practices and succeed in export markets,” Combet said. Minister for small business, Chris Bowen, claimed factors that hold Australian small firms back include access to finance, access to advanced technologies, difficulties breaking into new markets and difficulties finding potential business collaborators and partners. “We want to ensure small businesses have access to programs that help identify new markets or research, assist with adopting new technologies or look at better ways of doing business. It’s about opening up opportunities that have previously been unavailable to this sector” Bowen said. Some of the A Plan for Australian Jobs package initiatives include:

  • A new $27.7million Enterprise Solutions Program to help SMBs gain access to public sector markets
  • Venture Australia, a $378.6 million package to facilitate Australian innovation-driven businesses growth by improving access to finance and business expertise
  • Extending Enterprise Connect, the government’s business advisory service, to provide important services
  • A new Growth Opportunities and Leadership Development (GOLD) initiative to provide focused support for SMBs with high growth potential
  • Establishing up to 10 industry innovation precincts to boost collaboration between businesses and researchers to develop the skills, technologies and capabilities needed for business success.
These measures are expected to complement other key policies, such as the National Workforce Development Fund, which aims to provide business with funding to help develop skills in their workforces. Under the changes to the R&D Tax Incentive, very large businesses with annual Australian turnovers of $20 billion or more will no longer be eligible for the incentive, but will be eligible to claim their R&D expenditure under general tax law provisions.

In addition, the change will add a third tier to the eligibility requirements for the program, which targets SMBs. It will apply to income years starting on or after July 1.

Deputy prime minister and treasurer, Wayne Swan,said the initiative will continue to provide easy-to-access support to about 10,000 companies each year that undertake eligible R&D. “The change will affect less than 20 corporate groups and will ensure this support is better targeted at small to medium businesses,” Swan said.

Savings from the reforms – an estimated $1 billion from 2014 to 2017 – will fund other government priorities, including the A Plan for Australian Jobs package.

“Companies that innovate are more productive, more profitable and more likely to create new jobs. International experience also shows that small companies are more responsive to R&D tax incentives,” Combet said.

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Tags greg combetgrowthSMBsChris Bowena plan for Australian jobsgovernmentR&D tax concession changesWayne Swan

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