Opportunity was a strong theme underpinning last week’s Budget.
The Budget was about responding to the pressures that small businesses are facing and building for the opportunities for the future.
I respect the fact that many of you in the franchising industry have made a living by seizing opportunities.
You’ve taken ideas and you’re running with them.
There are over 1,600 franchise systems operating across Australia.
Over 94,000 franchisees.
And 574,000 people employed in the sector.
That’s great for the national economy and even better for our local communities.
So it’s an honour to open today’s national convention.
I’m pleased to talk about the things we’re doing to help you make the most of opportunities.
Federal Budget
The Budget was a plan for security, for growth, and for creating opportunities.
It’s a responsible plan.
It’s a practical plan.
And it recognises the innovative role of small businesses – who make up a large part of the franchising community.
Energy
Responsible and targeted cost‑of‑living relief was the number one priority in our Budget.
As part of our Energy Price Relief Plan we’ve partnered with state and territory governments to deliver a $3 billion package in direct electricity bill relief.
Around 5 million households will be eligible to have up to $500 deducted from their power bills in the next financial year.
And around 1 million small businesses will be eligible to have up to $650 deducted from their power bills in the next financial year.
Small Business Energy Incentive
We also announced a Small Business Energy Incentive.
It’s a new tax incentive to help small and medium businesses save energy and save on their energy bills.
Businesses with aggregated annual turnover of less than $50 million will be eligible.
They will have access to a bonus 20 per cent tax deduction on spending that supports electrification and more efficient use of energy.
For example, that might include things like electrifying their heating and cooling systems, or upgrading to more efficient fridges and induction cooktops, or installing batteries and heat pumps.
Up to $100,000 of total expenditure will be eligible for the incentive, with the maximum bonus tax deduction being $20,000 per business.
Eligible assets will need to be first used or installed ready for use between 1 July 2023 and 30 June 2024.
This incentive helps smaller businesses share in the benefits and opportunities of the energy transition that’s underway.
Instant asset write‑off
We also announced a $20,000 instant asset write‑off to improve cash flow and reduce compliance costs for small businesses.
Businesses with aggregated annual turnover of less than $10 million will be able to take advantage of the instant asset write‑off.
They will be able to immediately deduct eligible depreciating assets if two main conditions are met.
The asset costs less than $20,000. And the asset needs to be first used or installed ready for use between 1 July 2023 and 30 June 2024.
The $20,000 threshold will apply on a per asset basis, so small businesses can instantly write‑off multiple assets.
Less time doing taxes
Reducing the time spent doing taxes is another way we’re making life easier for small businesses.
It’s one of the things I hear most from small businesses about how government can better support them.
As part of the Budget, we announced five targeted measures:
First, we’re enhancing the National Tax Clinic program.
This means improved access to tax advice for small businesses and more tax clinics in regional areas.
Second, we’re getting rid of duplication for Single Touch Payroll lodgements.
We will do this by allowing employers to provide their tax agents with authority to act on their behalf for extended periods.
Third, we’re trialling an expanded ATO independent review for small businesses with aggregate turnover between $10 million and $50 million who are in dispute with the ATO.
Fourth, we’re allowing small businesses up to four years to make self amendments to their income tax assessments.
And fifth, we’re reducing the ATO’s use of cheques.
These improvements save time – time better spent managing and growing a business.
Cyber security
Cyber threats are another concern for small businesses.
In fact, small and medium sized businesses are the targets of 60 per cent of cybercrime.
In the Budget, we announced $23.4 million in funding for the Cyber Wardens program.
It works on the same premise as having a fire warden.
Cyber wardens will be trained to improve safety and protect their businesses from online threats.
COSBOA will deliver the program which support more than 15,000 small businesses.
Better deal for small businesses
This builds on the actions we’ve taken in our first year of government to get a better deal for small businesses.
For example, one of our first actions after being elected was to strengthen unfair contract terms protections.
We’re updated Commonwealth Procurement Rules to ensure small businesses get a bigger slice of the approximately $70 billion a year on contracts the Australian Government spends every year.
Unlocking online opportunities, we funded a new round of the Digital Solutions – Australian Small Business Advisory Services Program.
We’ve implemented the first round of an energy efficiency grant program in March.
In the October Budget, we extended funding for tailored programs to support small business owners’ mental health and financial wellbeing.
And we announced an independent review of the Payment Times Reporting Act 2020.
Franchise Disclosure Register
We’ve also improved transparency for those looking to buy a franchise.
The Franchise Disclosure Register went live in November last year.
I would like to take this opportunity to commend the franchising sector for the way it engaged with this new requirement.
It was great to see franchise systems embracing the register to put their best foot forward and demonstrate their commitment to transparency.
Available via business.gov.au, the free directory lists franchise systems operating in Australia.
The information on the register makes it easier for newcomers to do their homework before signing up.
For example, say someone has their heart set on buying into a fitness franchise.
They can search the register and compare different franchises in the ‘sports and recreation’ industry sub‑division.
They can see when a franchise system started operating in Australia.
They can see the states and territories where it operates.
And they can see where it intends to expand.
Importantly, they can compare set‑up costs and get an idea about other payments.
Franchising Code of Conduct Review
The mandatory Franchising Code of Conduct has been part of the regulatory landscape for 25 years.
The overarching aim hasn’t changed but the Code has seen several amendments since its introduction in 1998.
Most recently, there were a series of amendments to the Code following the Fairness in Franchising parliamentary report.
As some of you know, we’re starting to lay the groundwork for a review of the franchising regulatory framework later in the year.
The review will make sure the regulatory framework continues to support both franchisors and franchisees.
It will evaluate the effectiveness of previous reforms and bring a number of smaller reviews under the one umbrella.
This includes required statutory reviews of the Franchise Disclosure Register and New Car Dealership protections in the Code.
We’ve haven’t settled the details yet.
We’re meeting with the Franchise Council and other stakeholders to help determine our approach.
We want to make sure we’ve heard directly from you about what you want to see out of this review process.
Broader consultation is likely to start in the second half of the year and I look forward to providing you with more details.
Closing remarks
The Albanese Government is committed to supporting the franchising sector and the small business community.
The Federal Budget provided responsible relief and practical improvements for small businesses.
We’ve taken some of the pressure off energy bills.
We’ve provided tax incentives to reduce emissions.
We’ve improved cash flow through the instant access write‑off.
We’ve made your tax life that little bit easier.
And we’ve provided funding for cyber security support.
This builds on our promise to get a better deal for small businesses.
I’m also pleased to be engaging with the sector in preparation for reviewing the franchising regulatory framework – it will be a priority for us.
All of our actions are about providing an environment where you can continue to make the most of opportunities.
Thank you again to the Franchise Council for inviting me.
All the best for remainder of the convention.