Budget 2023 - What It Means For Business
May 18, 2023
With rising living costs, fuelled by weather events, increasing interest rates and inflation, this ‘No Frills’ budget has focused on supporting families, particularly young families.
The $1.8 billion early childhood education package is one of two ‘family focused’ packages that will also help business owners and employers by supporting parents returning to the workplace. The second package is a $330 million extension to free public transport which, at a stretch, may assist with getting people to work. More details available here.
Other than that, there are no significant financial incentives or packages designed to assist the commercial sector. Businesses may benefit from a general improvement in economic conditions with inflation predicted to reduce in 2024 (potentially to 3%) and unemployment projected to peak at 5.3%. However, there is concern that this budget requires an increase in spending of $5.5 billion. As Sharon Zollner, Chief Economist of ANZ Bank said, ‘that’s a lot of borrowing.’ It will be interesting to see how financial markets respond, as the Government raises capital.
For those businesses and communities impacted by recent weather events, they will be anxious to see damaged infrastructure repaired. The $1 billion set aside for this will also be used to protect against future events.
Wholesale fuel prices will come under the spotlight with $1 million allocated to Commerce Commission investigations. Any downward movement in fuel prices will benefit both individuals and businesses.
The horticultural industry will benefit from $5.9 million this year and $7.8 million in 2024/25 designed to support collaboration between the industry and technology, growing talent and commercialising research and projects.
Tourism gets two bites of the cherry with $1.5 million every year through to 2027 to fund tourism policy and capability and the Tourism Better Work Action Plan gets $6.5 million this year followed by $6.8 million in 2024/25.
The Regional Business Partners Network (of which Sudburys is an approved service provider) will receive $800,000 each year through to 2027, to improve the capability of business owners and their teams.
The Small Business Services facility run by the Government provides SMEs with resources, tools and guidance and this will continue to be funded through to 2027.
In summary, this is a budget that sees increased spending (borrowing) almost exclusively used to alleviate rising living costs. Through targeted investment it is hoped that individuals and families will be able to weather challenging economic conditions without contributing to inflation. Economists are on the fence with regards to the likelihood of a recession happening soon with many predicting a brighter outlook for 2024 /25.
For savvy business owners the focus needs to remain on a proactive plan of action that includes eliminating waste, optimising cash flow and nurturing customers. This approach is probably best summed up in this quote: 'It's not what happens to you but how you react to it that matters.'
If you'd like to chat about how the budget impacts your business, please call 09 430 4888.
 (600 × 400 px).png)