What does the 2022/23 budget mean for my business?
What does the 2022/23 national budget mean for your small business? We break it down.
The 2022/23 budget lays out a clear focus on driving technological innovation as the federal government encourages SMEs to embrace Australia’s burgeoning digital economy.
Josh Frydenberg’s announcement last Tuesday night introduces several significant changes that are aimed at reducing the operational costs of SME’s. As of July 1st, Australian businesses earning less than $50 million annually will be entitled to a further tax break from 30% (2013-14) to 25%, the lowest rate in 50 years. In addition, small business will be able to claim 120% on expenses related to tech development, tech related employee upskilling and services that support their digital capabilities (such as e-invoicing, cloud computing and web design) up to $100,000 from now till June 30, 2023.
Undoubtedly a huge win for small businesses, the broad view on eligible spending under the Technology Investment Boost will also allow Australian businesses to deduct a bonus 20% off claims against depreciating assets, cyber security systems, subscriptions to cloud based-services, portable payment devices and the purchase of laptops to alleviate some of the financial pressures experienced during the pandemic. With an estimated 3.6 million Australian businesses eligible for the tax cut, these budget measures are expected support Australia’s “digital revolution” by rewarding those who invest in technology.
The Treasurer also addressed industry skills and training as a focus for 2022/23 by committing a $2.8 billion investment to increase the take up and completion of trades. Of the $2.8 billion, $954 million has been pledged to the new Australian Apprenticeships Incentive System, which will see $5,000 payments for new apprentices in priority industries and $15,000 wage subsidies for employers who take them on. Additionally, $9 million a year will be committed to supporting women entering high-paying trade occupations. Demonstrating a commitment to upskilling, the government argues these measures will create more skilled workforce that “will drive productivity gains for small businesses, attract and retain staff in a tight labour market and support their future growth”.
Other notable announcements included a $4.6 million commitment to Beyond Blue to provide free, accessible, and tailored mental health support to business owners in light rising rates of mental health struggles. In addition, a $5.6 million contribution to the Fair Work Commission to establish a dedicated unit to deal with unfair dismissals and industrial protection disputes for small businesses.
All in all, the 2022/23 budget reaffirms the government’s commitment to supporting SME growth in Australia. Increased tax breaks, taxation reform and extra-funding dedicated to apprenticeships should assist in reducing operational costs and promoting growth as we recover from the pandemic. Whilst SMEs are expected to retain more of what they earn, this year’s budget represents a strong stance on encouraging the development of Australia’s digital economy.
What is your view on the budget announcement? Will these initiatives make a real impact on how you operate your business? We want to know!