With the Australian Federal Budget being handed down on Tuesday 29 March (2 months earlier than the usual May date), there was a question whether the budget would benefit small businesses or just the government’s sway in the polls.
Happy to say that the government has committed to supporting small businesses so they can focus on doing what they do best — “running their businesses, growing their businesses, and creating jobs for Australians”.
After a tough few years, Treasurer Josh Frydenberg showed that small businesses were among the winners in the 2022-23 Budget. The government has increased tax breaks for SMEs who invest in new technology and skills, as well as additional funding in apprenticeships which will also be welcomed.
“From tonight, every hundred dollars these small businesses spend on digital technologies like cloud computing, e-invoicing, cybersecurity and web design will see them get a $120 tax deduction,” Mr Frydenberg said.
The Treasurer also said that “starting tonight, for every hundred dollars a small business spends on training their employees, they will get a $120 tax deduction”.
With the increase in skilled employees, this will power productivity for small businesses, attract and retain staff in a short staffed market, and support future growth and economic activity.
So what did the budget deliver for small businesses? We outline it for you below.
- Businesses with an aggregated turnover of up to $50 million will have tax deductions via:
- ‘Skills and Training Boost’ and will be able to deduct an additional 20 percent of expenditure incurred on external training courses provided to their employees
- ‘Technology Investment Boost’ and will be able to deduct an additional 20 percent of expenditure (capped at $100,000) incurred on business expenses and depreciating assets that support digital adoption (e.g. subscriptions to cloud-based services, cyber security systems, portable payment devices)
- $2.8 billion in funding for an overhauled apprenticeship incentive scheme to grow the number of qualified tradespeople by subsidising the wages of select apprentices and trainees, providing up to $5,000 payments to new apprentices (in priority sectors) and up to $15,000 in wage subsidies for employers who take them on.
- $8 million to the Australian Small Business and Family Enterprise Ombudsman to work with service providers to offer business planning, capacity building and financial literacy.
- $5.6 million over 4 years from 2022-23 for the Fair Work Commission to establish a dedicated unit to support small businesses, including unfair dismissals and general protections disputes.
- Reducing the tax rate for small businesses from 30 percent in 2013-14 to 25 percent from 1 July 2021, the lowest level small businesses have seen in 50 years.
- $2.1 million over 2 years (2021-22) to extend the ‘Small Business Debt Helpline’ program. This is operated by Financial Counselling Australia and will continue to provide financial counselling to small businesses facing financial issues.
- $4.6 million over two years (2021-22) for free, accessible and tailored mental health support for small businesses and entrepreneurs through Beyond Blue.
- Temporary fuel excise – fuel will be halved, saving motorists 22.1 cents per litre of unleaded and diesel fuel which will be in place for six months until 28 September 2022.
- $480 million spent on upgrading the NBN fixed wireless services in rural and regional areas
- Changes to procurement guidelines for small businesses seeking Commonwealth contracts
- Improved efficiency and reporting through the redesign of the ‘Payment Times Reporting Portal and Register’