Top 5 Ways The 2021-22 Budget Will Impact Your Business
Baited-breath, fingers crossed, constant webpage refreshing... The Federal Budget announcement week is a much-anticipated time in the SME sector.
Last week, the federal government released the 2021-22 budget.
At a glance, it’s clear that the new budget was clearly designed to support the economic bounce-back as we recover from the COVID-19 pandemic. We can see more support for businesses, boosts in funding, as well as a focus on job creation.
What does it all mean for you? We’ve listed the top 5 ways it could impact your business.
New tax policies will encourage spending and investment
There has been a one-year extension added to the government’s temporary “full expensing scheme” which allows most businesses (any with turnover or income of <$5B) to instantly write-off the cost of assets they won’t use or install until June 30th 2023.
Write-offs will also decrease the amount of taxes businesses must pay. This policy means that business owners can have an instant tax break now rather than wait over several years as those assets depreciate and provide deductions that way!
They have also introduced Instant tax break boosts cashflow, which encourages and accelerates any investing activities that businesses planned to do; boosting economy.
Policies have made it easier and cheaper for businesses to hire new employees
There is $2.7B dedicated to extend the ‘Boosting Apprenticeship Commencements’ program that will support over 170,000 new apprentices and trainees in getting employment by providing a wage subsidy for to employers that hire newly commencing apprentices and trainees. Tradies, you reading?
In addition, $1B set to extend JobTrainer which allows young Australians on Centerlink to access low-cost or free up-skilling courses in IT, aged-care, childcare, hair and beauty, and hospitality. Employers will get back a 50% wage subsidy for hiring young people in the scheme.
Another positive change is that industries including tourism and hospitality are no longer limited to hiring student visa holders for 40 hours a fortnight. We love to see it.
Encouraging digitisation of Australian SMEs to ensure they stay competitive
In a more innovative move, there is $1.2B budgeted to provide tax breaks for video games industry and encourage Australian businesses to invest in digital infrastructure.
There is also a focus on driving transition of e-invoicing by businesses which is expected to add $28B to the Australian economy over the next 10 years. Hello Thriday!We should also see an expansion of digital solutions provided by the Australian Small Business Advisory Services to help build SME digital capabilities.
In addition, the federal government has promised to improve internet and mobile connectivity in peri-urban areas!
Tax system reform that makes it easier for SMEs to dispute with the ATO
Additional funding for the ‘Australian Small Business and Family Enterprise Ombudsman’ with the aim of enabling SMEs to initiate disputes with the ATO outside the court system.
New powers provided to the Administrative Appeal Tribunal (AAT) so that it is easeir, cheaper and faster for SMEs to pause or modify debt recovery actions.
This ensures small businesses will not have to start paying a disputed debt until the case has handled by the AAT
Support for regional economies and businesses
$250M has been added to to ‘Building Better Regions Fund’ to supply grants to projects that will benefit regional communities economically and socially. This will hopefully encourage investment in those areas, improving the community, accelerating their recovery and hopefully driving up tourism, spending and employment.
And, through a $10B government guarantee, the government is working towards making property insurance more affordable for households and SMEs in cyclone and flooding prone areas of northern Australia. Recent insurance inquiry reveals that many small businesses are crippled by rising costs of insurance, this will make sure SMEs have access to essential coverage.
Side note - the team at Thriday are also thrilled to see initiatives to:
Support construction jobs
Improve women’s safety and economic security
What were your reactions to the 2021-22 budget? We'd love to hear from you at email@example.com