The results of the 2023 Family Business survey report identified top concerns for Australian family businesses in the current environment.
The findings noted the top three for family businesses are:
- Cash flow: ensuring a steady cash flow is crucial for family businesses as they need to manage where money will come from and plan for contingencies.
- Retaining and attracting talent: this is particularly important for family businesses where sometimes they can be working with smaller teams.
- Succession planning: preparing the next generation of leadership from one generation to the next is critical for family businesses to ensure the legacy created is not lost or forgotten.
There were some measures from the Budget targeted at small businesses that addressed the above concerns but it’s important to understand that while some family businesses are ‘small’, many fall outside of this definition.
Family businesses can vary from the sole trader to large businesses, employing thousands of Australians. The Federal Budget delivered on small businesses, but there is more to be done for larger, family-owned businesses within Australia.
How were the top concerns addressed?
1. Cash flow
$325 energy bill rebate
One million small businesses will receive a $325 energy bill rebate, a welcome boost that reflects our commitment to supporting a large percentage of the economy. This initiative not only acknowledges the hard work of family-owned businesses but also provides a tangible relief that – although modest – can contribute to easing the burden of cashflow pressures during these challenging times.
Instant asset write off
The Government has proposed to continue the $20,000 instant asset write-off for businesses with a turnover of less than $10m until the end of the financial year. While this commitment was also part of the 2023 Budget, it has not yet been legislated, and with only 6-7 weeks left in the financial year, the lack of certainty may deter businesses from investing in necessary assets.
These policies need to be legislated at the beginning of the financial year to maximise their effectiveness and provide businesses with the confidence to make informed decisions about asset acquisition. Timely legislation can serve as a catalyst for economic activity, and predictability in tax incentives is crucial for business planning and growth.
2. Attracting and retaining talent
Personal tax cuts can indirectly benefit family businesses by increasing disposable income for consumers, which may lead to higher consumer spending and demand for services. Enhanced consumer purchasing power and increased economic activity could provide a supportive environment for family businesses to thrive. Overall, a well-structured tax system can serve as a foundation for robust economic growth, fostering an ecosystem where family businesses can prosper alongside individual taxpayers.
3. Succession planning
Succession planning presents an opportunity for policymakers to engage and understand the unique issues faced by family businesses. By understanding the unique challenges faced by family businesses, there can be initiatives created to support a smooth transition from one generation to another.
Considerations such as a CGT rollover and revisiting the 80-year restriction on family trusts are positive steps towards creating a more conducive environment for family businesses, helping secure a more prosperous future for family businesses in Australia.
What about Future Made in Australia?
There’s also the opportunity with the Future Made in Australia Act once there is more detail released. At this stage very little detail has been provided, but this will provide an opportunity for the Government to make long term change, this has the potential to strengthen the incredible foundations set by the family business sector.
We’re here to help
If you’d like to discuss anything that was announced in the Federal Budget and what measures could help your family business, please reach out to our team today.
Learn more about how our Family business consulting services can help you
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