14th May, 2024
Treasurer Jim Chalmers’ third Federal Budget was just announced, with the Government’s second consecutive surplus a major point of note.
The 2024 Budget focuses on ‘Cost of living help and a future made in Australia’.
In total, the Budget includes $641.4 million in targeted support for small businesses.
But, how exactly will the Government’s initiatives help small and medium-sized enterprises (SMEs) in Australia in the months ahead?
We got the lowdown on the updates and will help you understand what’s in the new budget for you as a small business owner.
The key takeaways revolve around:
Let’s start with a look at how your tax bill might be affected in the future.
For starters, the Government has provided personal tax cuts for all taxpayers from 1 July 2024, with all 13.6 million Australian taxpayers benefiting and enjoying an average cut of $36 a week.
The Government will reduce the current 19% tax rate down to 16%, and the current 32.5% tax rate to 30%.
Furthermore, they will increase the income threshold for the 37% tax rate from $120,000 to $135,000 instead.
For those in the higher 45% tax bracket, this percentage will kick in at income levels of $190,000 rather than $180,000.
Another key initiative that will help SMEs with their cash flow is the Government’s investment of $290 million to extend the $20,000 instant asset write-off for another 12 months, until June 30, 2025. (This is available for small businesses with an annual turnover of less than $10 million.)
Once enacted, this extension enables small business owners to deduct the cost of new assets immediately.
Furthermore, there’s $25.3 million being allocated to improve payment times to small businesses, as well as $23.3 million to increase eInvoicing adoption.
The increase in usage of eInvoicing technology will help to disrupt payment redirection scams and boost productivity.
Overall, the Government’s cash flow support will help up to 4 million small businesses with immediate financial pressures.
One of the big focuses of the new Budget is in easing the cost of living pressures.
While this is, of course, factored in on a more personal level for individual Australians, it’s going to be welcome news for those small business owners struggling with the cost of living themselves. More money in the pockets of average Australians helps SMEs as people start to spend more.
Initiatives of note include:
Most SMEs will also be happy to hear that the new budget allocates $3.5 billion in new energy bill relief, helping around one million small businesses.
This relief includes a rebate that helps reduce operational costs associated with energy prices for offices, warehouses, and other business premises.
From 1 July 2024, eligible small businesses will receive $325 back on their electricity bills.
With so many small businesses struggling to hire and retain staff in the last couple of years, it’s not surprising that the 2024 Federal Budget also includes investment in skills and education.
In particular, this covers the provision of almost $90 million for 20,000 additional fee-free TAFE and VET places.
This support focuses on industries like construction where small businesses are prevalent.
Treasurer Chalmers also announced $500 million in funding for skills development in priority industries such as clean energy and manufacturing to help create ‘A future made in Australia’.
The introduction of the $22.7 billion Future Made in Australia package announced direct support for innovation and sustainability in this country.
This package includes production tax incentives and funding for innovation, particularly in green industries.
It also offers opportunities for small businesses to more effectively innovate and adapt to new technologies.
The Federal Government is investing in the digital innovation of SMEs this year and beyond.
It’s investing $23.4 million on a Cyber Wardens program to provide free online training for small business owners and their staff to help drive cultural change and a cyber-safe mindset, along with $11.1 million for the Small Business Cyber Resilience Service to help small businesses build their cyber resilience.
This service will also provide support when businesses are affected by a cyber incident.
Another area where the Budget will be of help to SMEs is in infrastructure and housing investments.
This includes efforts to clear local infrastructure bottlenecks and fund more social and affordable housing.
This streamlining can, in turn, help stimulate local economies and create opportunities for small businesses involved in construction and related services.
Those in the construction, building, design, and related sectors will be keen to hear that the 2024 Budget allocates an additional $16.5 billion for new and existing infrastructure projects across Australia over the next 10 years.
Plus, $2.2 billion will be used to enhance connectivity and increase accessibility and reliability of South East Queensland transport networks, which will help many businesses operating in those areas.
To help Australian businesses move into the future more effectively, Treasurer Chalmers announced measures to both boost competition and reduce compliance costs.
These measures include strengthening the mergers regime and abolishing over 450 nuisance tariffs.
This strategy will help small businesses by lowering barriers to entry and reducing regulatory burdens.
Plus, to help SMEs win more government contracts, the Government will invest $183.8 million in defence industry grants and open the door to more government work via The Buy Australian Plan and a focus on simplifying and decoding procurement processes.
There are a few other initiatives worth noting for SMEs in the 2024 Federal Budget.
For example, the Government will deliver $10 million to provide extra support for SME employers administering the Paid Parental Leave scheme.
Plus, regional areas weren’t forgotten, with $777.4 million allocated to develop local jobs, services, and economic opportunities in remote regions around Australia.
$68 million is also being spent on rolling out Wi-Fi in remote communities, which will help SMEs in those areas operate more effectively online.
With business life taking a heavy mental and emotional toll on many people, the Budget includes $10.8 million to support the mental and financial wellbeing of small business owners.
All of the initiatives outlined above are designed to ease cost of living pressures, support economic growth in Australia, and boost the capabilities of SMEs to thrive in a changing economic landscape.
Click here for more Federal Budget coverage.
Information provided in this article is of a general nature and does not consider your personal situation. It does not constitute legal, financial, or other professional advice and should not be relied upon as a statement of law, policy or advice. You should consider whether this information is appropriate to your needs and, if necessary, seek independent advice. This information is only accurate at the time of publication. Although every effort has been made to verify the accuracy of the information contained on this webpage, MYOB disclaims, to the extent permitted by law, all liability for the information contained on this webpage or any loss or damage suffered by any person directly or indirectly through relying on this information.