Was there anything in the budget for small business?


As expected, there was not a lot in the Budget for small business – it was focussed predominantly on providing assistance for households, welfare recipients and low-income earners in managing the cost of living crisis. You may have noticed there has been much discussion around whether the measures announced will add to inflationary pressure and it seems that there is no agreement amongst the experts as to whether it will be stimulatory or not. Time will tell.

It is worth noting that the Budget is predicted to be in surplus (for the short term anyway). This is thanks to a number of things including increased income tax (particularly from individuals – partly because so many people are employed and partly because wages are increasing), increase commodity prices, inflation and cuts in spending.

Things of note for small business:

Instant asset write off – this will continue through until 30 June 2024 but limited to $20,000 per asset for entities with aggregated turnover less than $10 million (with no limit on the number of assets).

GST compliance – the ATO is going to receive $600 million in extra resourcing over 4 years to “continue a range of activities that promote GST compliance”. They are expecting to receive $3.8 billion over the 4 years so we expect these compliance activities to be wide reaching.

Small Business Energy Incentive – this incentive will be available to businesses with aggregated turnover of less than $50 million. Businesses will be able to deduct an additional 20% of the cost of eligible depreciating assets that support electrification and more efficient use of energy. This will apply up to $100,000 of expenditure with a maximum additional deduction being $20,000. This is to encourage businesses to move away from gas and is keeping with the theme of moving Australia towards renewables.

Energy Price Relief – small businesses may also receive a share of the energy bill relief that was announced for pensioners and other welfare recipients. This is being coordinated with the state government so the details are a bit light on at the moment – as the delivery will differ amongst the states, it’s a bit “watch this space” at the moment.

Encouraging investments in build-to-rent accommodation – increasing the capital works deduction rate from 2.5% to 4% for newly constructed build-to-rent developments.

Other measures (in the fine print):

  • Improving small business cash flow – applying a 6% increase to quarterly instalments rather than 12%
  • Cyber security – there will be a small business Cyber Wardens program to help businesses build their resilience to cyber security attacks
  • Industry Growth Program – this will support AMEs and start ups develop new products and services to grow their operations
  • Buy Australian Plan – improve government procurement and using the Government’s buying power to help industry growth

There will be more detail around these measures in the coming months.

Please contact you Holman Hodge Adviser if you have any questions in relation to the above.