SME lender urges NSW government to help with tax debt

Non-bank SME lender Banjo Loans is calling for more small business incentives in tomorrow’s NSW state budget.

The first budget under the new Minns government, set to be released on Tuesday, 19 September, is expected to reveal both new investments and sweeping cuts as Treasurer Daniel Mookhey warns of rising net debt levels, forecast to hit $187 billion by mid-2026.

Outlining his budget ‘wish list’, Banjo Loans CEO Guy Callaghan said that while the state government will likely be focusing on cutting unfunded spending and building new schools and hospitals, he urged them not to forget small businesses in their budget.

“New South Wales SMEs, particularly those exposed to discretionary spending patterns, are currently doing it very tough, as consumers continue to tighten their belts in the face of rising mortgage rates and inflation-fuelled cost pressures,” Mr Callaghan said.

“They’ll be looking to the state government to help ease that burden, such as an increase to energy bill relief or cuts to the payroll tax.

“Small business is the engine room of the NSW economy, so the government needs to show that it is offering stability in a time of turmoil.”

Mr Callaghan suggested that the state government should also advocate to the federal government on behalf of SMEs to provide businesses with further assistance in dealing with tax debt.

“We know that businesses are under immense strain from the Australian Tax Office to pay tax debt that accumulated during and post the COVID-19 pandemic,” he said.

“If the government could incentivise more businesses to go on a payment plan, that could potentially take off some pressure and enable them to focus on running their businesses without worrying about debt.”

Mr Callaghan added that another issue was the large discrepancy between demand for housing, which was being fuelled by significant increases in immigration, and supply.

“We haven’t a snowball’s chance in hell of reaching these targets if state governments such as NSW don’t streamline building approval processes and remove red tape for developers,” he said.

“We’d like to see the government change the local infrastructure contributions policy, which sets the framework for local bodies to charge infrastructure fees, to reduce the contributions threshold to provide a boost to developers.”

So far the Minns Labor government has announced that its upcoming budget will include:

• $3.5 billion to tackle school infrastructure backlog for Western Sydney
• An additional $800 million to the Transmission Acceleration Facility to connect the state’s Renewable Energy Zones (REZ) to the grid sooner
• An additional $400 million to build the $700 million Rouse Hill Hospital and $438.6 million for regional paramedics
• $100 million package of initiatives to invest in early learning and enhance the sector’s workforce
• Increasing the HSU awards workers’ share of tax savings to 70 per cent
• Committing $115 million to properly resource the NSW Reconstruction Authority

[Related: $20k instant asset write-off ‘too small’ for SMEs, says broker]

Written by Reporter

Last Updated: 15 September 2023

Published: 18 September 2023