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The ongoing challenges of inflation, high interest rates, staff shortages, and the Australian Taxation Office’s (ATO) debt recovery efforts have created a tough economic environment, making this year’s budget crucial for many SMEs.
Banjo Loans CEO Guy Callaghan believes the federal budget is a pivotal moment for SMEs across the country.
“While specifics won’t be confirmed until the Budget is announced, I would suggest that understanding the potential implications of key measures is essential for business owners,” Callaghan said.
Government support for small businesses has been critical in recent years, with rebates, grants, and other financial incentives providing essential relief.
“Last year, eligible SMEs received a $325 rebate on electricity bills and we hope to see similar support measures in 2025,” said Callaghan.
“Given the pressure many small businesses face in managing rising operational costs, continued financial assistance would provide significant help in easing cash flow challenges.”
Expanded support through rebates, grants, and vouchers could allow SMEs to better manage their expenses and focus on long-term growth.
“As such, keeping an eye on any announcements related to financial support will be crucial for SMEs planning their budgets for the coming year,” he said.
Secondly, the impact of rising interest rates continues to be felt across many sectors. Despite the recent 0.25 per cent drop in interest rates announced by the RBA in February, borrowing costs remain a significant concern for SMEs, particularly those relying on loans to fund expansion or manage cash flow.
“We would like to see targeted measures aimed at easing the burden of these higher borrowing costs,” Callaghan said.
“This could include low-interest loans or grants for innovation. Any support in this area would be a welcome relief for SME businesses looking to expand or invest during this period of economic uncertainty.”
Callaghan also expressed hope that the government would restrain spending to avoid further inflation.
“After 13 rate rises since May 2022, we’ve started to see inflation settling down,” Callaghan said.
"While we understand spending is required, we are hopeful the government will consider the impacts overspending will have on inflation, on families, on SMEs, and on all businesses and the wider economy in Australia.”
A significant change that will affect SMEs this year is the criminalisation of wage theft, which came into effect on 1 January 2025. Intentional underpayment of employees is now considered a criminal offence, placing greater responsibility on small-business owners to ensure their payroll processes are compliant.
In response, the government has introduced the Voluntary Small Business Wage Compliance Code, which provides clear guidelines for small businesses to meet their obligations and avoid penalties.
“We hope that the government will continue to provide resources to assist SMEs in adapting to the new wage theft legislation requirements and help them manage any potential compliance challenges,” Callaghan said.
“A focus on education and support would be invaluable for small business owners navigating these changes.”
As Australia works to phase out cheques by 2030, many SME businesses will need to complete their transition to 100 per cent digital payment methods. While the government has been working to support businesses through this shift, additional assistance will be necessary to ensure a smooth transition.
“We’d love to see the Budget include measures aimed at helping small businesses with the transition to totally digital payments and open banking,” Callaghan said.
“Support in the form of grants or resources for businesses to adopt digital payment systems could help to speed this process up and reduce the reliance on outdated cheque payments, keeping SMEs in line with future industry standards.”
He also said that meaningful incentives could make open banking a more viable option, allowing SMEs more control of their banking data, which would provide them with better borrowing, spending, and financial management options.
Furthermore, innovation and workforce development are crucial for SMEs to stay competitive in a rapidly changing market.
With the 2025 federal budget approaching, there is growing expectation that the government will continue to fund initiatives that support technological advancement and skills development.
“Whether through grants for business innovation or funding for upskilling programs, these types of initiatives can help SMEs evolve with the market,” Callaghan said.
“By supporting businesses with the tools and training they need to adapt, there will be benefits to everyone, especially when it comes to long-term sustainability and growth of Australian business.”
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