Australia: Federal Budget 23-24
6 Ways Australian Businesses Can Benefit
We all know that as entrepreneurs we must pay attention to many areas. The Federal Budget is one of them, this tells us where the country's resources will be redirected and where are the priorities. If you are thinking to have a business or you have one already, this article is for you!
In case you are in another country, this is a reminder to check the Federal Budget of your country and how the measures taken in your country affect your business.
You will find the Official information at this link
This is a blog entry where I highlight the main areas (in my opinion) that we should consider for our strategic plans.
How does the new Budget impact my business?
Let’s talk about this Budget and Business:
1.Small business asset write-off - Deducción de Activos
The Australian Government is increasing the instant asset write-off threshold to $20,000, from 1 July 2023 until 30 June 2024.
Small businesses, with aggregated turnover of less than $10 million, will be able to immediately deduct the full cost of eligible assets costing less than $20,000 that are first used or installed ready for use between 1 July 2023 and 30 June 2024.
The $20,000 threshold applies to each individual asset, so businesses can buy and write off multiple assets as long as each one costs less than $20,000.
For hospitality businesses, assets such as kitchen equipment, furniture, coffee machines, printers, computer equipment, and technology such as iPads and tablets can all be written off under the scheme. For retailers, assets such as furniture, computer equipment, and tech items can all be written off – as long as each item costs less than $20,000. More info Link ATO
2.Business tax compliance - Cash flow boost for businesses
The government has worked with the ATO on several tax compliance initiatives that aim to make life easier for businesses and improve their cash flow.
The government is providing cash flow relief for approximately 6.1 million businesses by halving the increase in their quarterly tax instalments for GST and income tax for the 23/24 financial year. This means that instalments will only increase 6% instead of 12%.
The ATO will forfeit outstanding failure-to-lodge penalties for late tax payments going back to late 2019 in a bid to encourage businesses to get up to date on their tax returns.
From mid-next year, accountants and tax agents will be able to file multiple Single Touch Payroll forms on their client’s behalf, rather than employers having to complete the process each month.
From mid-2025, small businesses will also be granted up to four years to amend their income tax returns
The GST and PAYGE uplift reduction is set to have a moderate impact on business cash flow, and the government predicts it will positively impact 2.1 million small businesses.
While some of the other tax compliance changes aren’t set to come into force for at least another 12 months, they’re slated to make life easier for small business owners, reducing the amount of time they need to spend on tax and administrative duties each year.
3. Funding for small businesses and start-ups
A new $392.4 million Industry Growth Program will provide advice and matched funding for small to medium-sized businesses and start-ups to develop new products and services to grow their operations.
More info Link Program
4.Help with energy costs
4.1 Small Business Energy Incentive
The Australian Government is introducing a tax break to help small businesses electrify and save on your energy bills. Businesses will be able to make investments like:
Electrifying your heating and cooling systems
Upgrading to more efficient fridges and induction cooktops
Installing batteries and heat pumps.
Businesses with an annual turnover of less than $50 million will have access to a bonus 20 per cent tax deduction for eligible assets supporting electrification and more efficient use of energy, from 1 July 2023 until 30 June 2024.
Up to $100,000 of total expenditure will be eligible for the incentive, with the maximum bonus tax deduction being $20,000 per business.
This is a great incentive for small businesses that are looking to upgrade their electrical equipment or who want to move away from non-electrical appliances, such as those powered by gas.
Hospitality businesses are the big winner here. Numerous kitchen appliances are eligible for the 20% deduction, including white goods, like energy-efficient fridges and induction cooktops.
Retail businesses looking to capitalise on the incentive can install new electrified heating and cooling systems. And those retail businesses that sell chilled and frozen goods can purchase new energy-efficient fridges and freezers under the scheme. More info Link Business Energy Incentive
4.2 Energy Bill Relief Fund
The Australian Government is partnering with state and territory governments to deliver up to $3 billion of electricity bill relief for eligible small businesses. From July 2023, this plan will deliver up to $650 for eligible small businesses, however, the total amount of bill relief will vary across our states and territories.
The energy bill relief scheme goes some way in easing the pressure of rising energy bills for small businesses, with up to one million SMBs set to benefit from the energy bill rebate in the next two years.
More info Link Energy Bill Relief Fund
5.Cyber security support
The Government will also fund measures to help protect small businesses against cyber threats through a $23.4 million program to help them train in-house cyber wardens. The program will be delivered by the Council of Small Business Organisations Australia.
Cybersecurity is a real threat to businesses, with big corporations like Optus and Medibank falling victim to data leaks in the past 12 months.
For small businesses, a cybercrime attack can cause significant financial and reputational damage.
With an increasing number of SMBs going digital – from online shopping to digital loyalty programs – cybersecurity should be a top priority for businesses that store customer data such as email addresses and phone numbers.
The Cyber Wardens Program, launched by the Council of Small Business Organisations Australia (COSBOA), will help SMBs build their resilience to cyber threats by training in-house cyber experts and will become Australia’s first cyber safety workplace certification. More info Link Cyber Wardens
6. Creative Industries
The Government is investing $286 million to renew and revive Australia's arts, entertainment and cultural sector through its landmark National Cultural Policy Revive: a place for every story, a story for every place. Revive will empower our talented artists and arts organisations to thrive and grow unlocking new opportunities, reaching new audiences and telling new stories in compelling new ways.
The Government is boosting incentives for the film industry that will support jobs and local businesses in the film and television industry.
More info Link National Cultural Policy Revive
For more information, please visit the Federal Budget website.