The Australian federal election, held on Saturday 18 May, returned a largely surprising result. Many opinion polls leading up to the election predicted victory for the Labor party. However, it looks like the Liberal-National Coalition will secure a majority in the House of Representatives. The Coalition needs 76 seats to form a majority in the House of Representatives.
Many political commentators and analysts are now working to identify what spurred the surprising federal election result. And as this happens, certainty is returning the business and economic environment in Australia with the federal election out of the way.
The Australian dollar rallied against major currencies pon news of the election result. This indicates that the market sees the Coalition’s policy platform of conservative economic management to be positive for the economy. These positive effects on the economy should be set to filter down to SMEs with the raft of tax minimisation and economic policies the Coalition announced in its election policies.
Here are some of the Government policies and programs that could help your SME grow and be more successful.
Export Market Development Grant Program
In the 2019 Budget, Treasurer Josh Frydenberg announced a further $60 million would be added to the Export Market Development Grant Program (EMDG). This Program allows businesses to subsidise the costs of advertising to international markets.
Under the EMDG Program, businesses can claim up to 50 per cent of eligible export promotion costs over $5,000. Plus, the total cost of the expenses must be at least $15,000. Eligible applicants can claim up to eight grants. Some of these eligible applicants include businesses such as Showpo and activewear label 2XU to expand to international markets.
Trade and Investment Support
The Government aims to help an additional 10,000 businesses begin exporting to overseas markets in the next three years. Apart from the EMDG program, the Australian Trade and Investment Commission (Austrade), is holding trade and investment seminars around Australia. But these seminars aren’t just information sessions on how to export to international markets. The seminars also give businesses an opportunity to network with Austrade officers face-to-face and ask questions.
The $100m Australian Business Growth Fund
One of the key election policies that the Government took the election was the $100 million Australian Business Growth Fund. This Fund will partner with financial institutions around Australia to provide equity financing to small businesses. However, funds will only be available to businesses with $2 million to $50 million in turnover. Modelled on similar programs established in Canada and the UK, the Australian Business Growth Fund will grow to $1 billion as it matures.
The other core small business policy brought to the election by the Coalition was lowering the corporate tax rate. In conjunction with other tax offsets for SMEs, the Government is lowering the corporate tax rate to 25% by 2021-2022.
For businesses that aren’t yet incorporated, offsets such as the instant asset write-off aim to provide tax relief to smaller businesses.
While the federal election is complete, it’s still too early to tell exactly what the Government’s specific focuses on SMEs will be. However, the Government’s policies to lower taxes and provide other resources through grants and tax offsets will be helpful for growing SMEs.
Speak with a lending specialist today about funding the growth of your business.