Australian Money - Aussie currency with piggy bank

By Chris Slack, Director, The Finance Consultancy

Whilst the new infrastructure projects and affordable housing projects featured in this year’s budget were welcomed by many in May, every budget has winners and losers. The question now is which businesses will survive long enough to deliver on these projects? The Finance Consultancy Director, Chris Slack, gives his thoughts below.

In recent years the construction industry has dominated the list of businesses that have entered insolvency – the largest by number since May 2020 – whilst one of the leading lenders to businesses in construction also recently ceased trading.

Monetary policies in the spotlight

The budget outlines a government’s fiscal policy, while this financial year many mortgage owners are focused on monetary policy as RBA announcements making repayments more and more unaffordable.

Government spending can affect inflation, which then in turn influences whether the RBA increases interest rates, and this then affects the value of Australia’s currency relative to other countries.

As such the measures of the budget may mean that the RBA has no choice but to make further rate increases in 2023. This would be a welcome relief for those businesses importing goods; but temper the demand for exports – depending on how a business chooses to manage currency risk.

The instant asset write-off reverting to a lower turnover threshold was inevitable, however many businesses relied on ‘sugar hits’ post-COVID, whether it be a rebate, quicker depreciation, or now with the payment for eligible businesses towards rising electricity bills.

Real-time super: good or bad?

The requirement to pay employees superannuation in real time makes sense albeit a few years away. Most businesses have not had an issue with meeting superannuation responsibilities – besides the few that have been considered ‘persona non grata’ by lenders.

Many businesses with higher turnover and lower margins already utilise debtor finance to cover payroll as they grow – which will add to any cash flow challenges. Federal Treasurer, Jim Chalmers, has outlined his budget playbook – so what is yours?

Here are the finance consultancy’s top tips:

  • Set your own capital expenditure budget for the next 12 months. What is the opportunity cost of not having the new vehicles/equipment?
  • Ensure your business is up to date with lodgement deadlines and tax responsibilities – the bank of the ATO is firmly closed
  • Assess whether your financials have improved this financial year and consider locking in any increase to your overdraft/lines of credit now to take advantage of future opportunities
  • Look at your currency risk management
  • Review your payment terms – both what you are receiving from suppliers and giving to customers. Can you access discounts for earlier payment that may be less than your costs of borrowing?
  • No business is too big to fail – get quotes for Trade Credit Insurance and strengthen your company
  • Regularly review the Personal Properties Securities Register (PPSR) at least twice yearly and get advice around this – are suppliers and financiers affecting your credit and opportunities without you being aware?
  • Review your advice team – accountants, lawyers, consultants etc. to constantly seek out best practice– and consider using a finance broker to keep your existing lenders honest

This Sponsored Editorial, is brought to you by the Finance Consultancy. For more information, visit

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