The 2015-16 Victorian Budget & Small Business
Shaking off the angst from a series of controversial decisions it made in its first few months in office, the Daniel Andrews Labor government has delivered what commentators are calling an economically responsible and relatively low-key first budget that prioritises job-creation, infrastructure and spending on basic public services such as Education, Health and Family. Small Business is also a beneficiary, although tax relief was not as significant as hoped for. The key measures affecting the SME sector include:
$508 Million for 100,000 New Jobs
Central to the Andrews government’s appeal to small business is the creation of a Premiers Jobs and Investment Fund, which will feature a panel of leading business and industry figures who will decide on how to allocate $508 million of public money to promising Victorian start-ups and other “job-creating” initiatives. In the words of Treasurer Tim Pallas, “It’s almost never been this cheap for businesses to borrow and invest in the next chapter of our economic future”. With the official (RBA) interest rate at an historic low of 2.0%, Mr. Pallas is hoping small business will go out and spend to boost state coffers and payrolls, creating “high-skill, high-wage jobs” in the process.
$200 million for Future Industries Fund
Another key plank of Labor’s first state budget is the establishment of a $200 million Future Industries Fund that will be chaired by 6 senior industry leaders and will seed up to $1 million in capital per firm, to promising new ventures in key industries with the potential to drive long-term economic growth – including Agriculture, Biotechnology, Construction, Energy, International Education and Professional Services. While some commentators don’t like the idea of government “picking winners” this is more money available to boost the state economy.
$60 million Start-Up Seed Fund
And topping off the Andrews governments small business giveaways is the establishment of yet another fund targeted at new business formation, this one being a $60 million fund set aside specifically for new start-ups requiring that initial seed funding to get their business ventures off the ground. Ostensibly limited to 120 start-ups per year, this fund unlike the others will not be chaired by a panel but funds will be allocated on a ‘first come, first served’ basis.
Overall, the Andrews governments first state budget delivers a responsible series of funding measures to aid new business creation throughout Victoria, through a series of 3 funds aimed particularly at emerging industries where the state holds a competitive advantage. In the words of treasurer Tim Pallas, this budget is “about finding opportunity, investing in the industries where we can lead the world. The mining sector isn’t driving this country anymore. There’s more demand for services, technology, and expertise”. And with interest rates at an all-time low, now is a good a time as ever for Victorian SME’s to spend and invest to keep the wheels of commerce rolling.