11th May, 2021

Federal Budget 2021: MYOB commends focus on digital

The government has produced a Budget that delivers investment in economic recovery and jobs growth — and that’s a win for businesses.

With the government focused on delivering positive outcomes for the Australian economy, this year’s Federal Budget takes us a step forward on the path to recovery.

Leading up to Budget, the Morrison Government announced a suite of measures to turbo charge Australia’s digitisation across all areas of the economy, under its Digital Economy Strategy, which it has confirmed in tonight’s Budget.

In his official announcement speech, Treasurer Josh Frydenberg told Australia that the country is “better placed than nearly any other country to meet the economic challenges that lie ahead”.

“Consumer sentiment is at its highest in 11 years,” Frydenberg said. “Business conditions reached record highs. And more Australians are in work than ever before.

“Our plan is working. Australia’s economic engine is roaring back to life. Since the last Budget, almost half a million jobs have been created.”

Extensions and new measures to benefit small to medium business

Following tonight’s Federal Budget announcements, MYOB says the extension of successful recovery measures announced in the 2020 Budget, including Temporary Full Expensing (an expanded version of the Instant Asset Write-Off), tax loss carry-back and the SME recovery loan scheme will be welcome news to SMEs.

“Our recent survey of 1000 SMEs found six in 10 owners and operators expect the economy to improve in the next 12 months. Key to this is that they are afforded the opportunity to recover effectively.

“Extending these vital measures will give SMEs the confidence to invest in themselves and in turn create jobs for Australians,” said MYOB chief employee experience officer Helen Lea.

MYOB calls out the following core themes as wins for small business:

Investment in digitisation

  • e-invoicing adoption and education: $15.3m set aside to drive awareness and adoption of e-invoicing is a very welcome step forward
  • Investment in digital skills: $100m designed to support the digital skills and cyber workforce pipeline will assist Australia in safeguarding its future as an innovation nation
  • Intangible asset incentives: offering Australian businesses a means of depreciating intellectual property and in-house software will be beneficial to Australia’s technology sector

Investment in SME recovery and growth

  • ATO debt recovery pause capability: allowing SMEs with less than $10m turnover to apply directly to the Administrative Appeals Tribunal to pause or modify their ATO debt recovery actions
  • Temporary Full Expensing and loss carry-back: the extension of Temporary Full Expensing and the loss carry-back will provide an additional $20.7 billion in tax relief over the forward estimates to support business investment and create jobs expensing for an additional year until 30 June 2023

Setting the economy up for SME success

  • Tax cuts: the $7.8 billion in saving afforded by tax cuts for Australians will mean more money in the hip pockets of families, equating to more discretionary spending for SMEs.

From Canberra, Lea commends the government for its aim of achieving Australia’s status as a leading digital economy by 2030.

“The Digital Economy Strategy will drive substantial economic gains for Australia, with solid investment in areas we know will make a difference for the digitalisation of SMEs,” said Lea.

“We particularly applaud the investment in e-invoicing as a tool that will yield great productivity returns and shorter payment times for small business.”

Greater digitisation challenges ahead

While the focus of the Budget has been to assist the business community better face the challenges of the day, one particular challenge went unanswered.

As highlighted in MYOB’s recent report ‘Closing the digital gap: an incentive to SMEs’ the business management platform provides modelling that shows SMEs could be contributing an additional $10.5 billion to the economy with more targeted digitisation incentives.

Unfortunately, a specific tax incentive for acquiring digital tools remained absent from the day’s announcements.

“We have proposed to government that a tax incentive would help SMEs overcome barriers to adoption and allow them to concentrate on the benefits afforded by digitisation,” said Lea.

“With small businesses contributing 35 percent of Australia’s economy, we see this as an essential step to assist these businesses in entering the digital ecosystem.”


Want to hear more about what the 2021 Federal Budget means for small business?

See our expert panel featuring the The Hon. Stuart Robert MP, Minister for Employment, Workforce, Skills, Small and Family Business, Dr Craig Latham, Deputy, Small Business and Family Enterprise Ombudsman and Helen Lea, Chief Employee Experience Officer, MYOB, discuss what the Budget means for your small business (from Friday 21 May at 9:30am-10:15 AEST). View it here today.