Beyond the numbers with Grant Thornton: Listen now
We made a pre-Budget submission in support of Mid-Sized Businesses and their role in driving the economy forward on 24 August 2020. This was supported by our report dated May 2019 entitled: “The overlooked opportunity in Australia’s mid-sized business”.
The segment is indeed overlooked. We submit that Government policy in the coming Federal Budget 2020-21, and indeed future Budgets, can take advantage of the economic opportunity to encourage Australia’s Mid-Sized Businesses (MSBs) with the right incentives and tax policies to grow in size, scale and reach to employ more (including more diverse) people and better contribute to the Australian economy. For the purposes of our submissions, MSBs are businesses with a revenue of $50m-$500m.
Our clients are nimble, entrepreneurial, innovative, growing, exciting and influential. They are inventing new medicines and products to improve the quality of life of people around the world. They are reimagining the way we bank. They are taking quality Australian produce around the world.
These are companies that represent the best of what Australia has to offer, at the right size to take advantage of market trends without cumbersome legacy issues that come with being a large business. MSBs should be recognised for their contribution to the economy to date and the potential they have to support the economy of the future.
Our Mid-Sized Business Report sets out more details supporting our submissions including comments provided by an Economist, Professor Neville Norman from the University of Melbourne and the Cambridge University, focusing on the potential payoff to the Australian economy from encouraging growth in MSBs. In particular, Professor Norman indicates that a 10% increase in revenue would articulate itself in one and five years in terms of profit and tax revenue, particularly in lieu of the proposed, but not ultimately enacted, general corporate tax cuts. The modelling indicates that a 10% boost in revenue for a $100m business would produce a 35% increase in cash flow over five years and a 25% increase in tax payable based on the 28.5% corporate tax rate.
Imagine then, the potential for MSBs to help the nation “grow” out of the COVID-19 recession. We are supportive of Tax Reform and we are pleased to see National Cabinet formed to deliberate on consistently applying legislation and reform. We hope the Federal Budget will provide the blueprint required to help our clients in the MSB space lead the recovery and create the jobs of the future.
Submission 1 – Extending the lower BRE tax rate to more MSBs
Submission 2 – Providing more certainty for R&D Tax Incentives
Submission 3 – Put GST back on the Tax Reform table
Submission 4 – Life sciences has never been more important
Submission 5 – Supporting Australian manufacturers
Submission 6 – Easing the burden on landlords and housing affordability
Submission 7 – Additional investment in childcare and early years’ education, and supporting skills for the future
Submission 8 – Professional services – planning for growth offshore under the RCEP
Submission 9 – Relieving pressures in Aged Care
Submission 10 – Reviewing and better resourcing Primary Health Networks (PHNs) to improve Healthcare
Submission 11 – Investing in a reliable and sustainable energy network
Submission 12 – Supporting Australia’s food basket
Submission 13 – Lock downs impacting the retail sector
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