How the Federal Budget stacks up for small business
The highly anticipated government’s 2022 Federal Budget has been announced with promises of relieving the soaring costs of living, reducing taxes associated with driving electric cars, and creating a more “responsible way” of recovering from the economic struggles of the Covid-19 pandemic. But the million-dollar question is, what does the 2022 Budget mean for you and your business?
What does the 2022-2023 budget mean for your business?
Most businesses have experienced some degree of hardship over the past two years. So, it goes without saying that as the Federal Government begins the hard yards of budget repair to create a more resilient economy, there will be measures in place to help restore balance to Australian businesses, right?
The answer to that question is both yes and no.
Businesses have been calling for a life raft since the Covid-19 pandemic. Whilst there were no direct tax concessions announced for small to medium businesses, there were various other measures designed to support SME’s and lower rising costs.
So, let’s start with the wins for small to medium businesses:
Addressing the skills shortage.
One of the biggest issues threatening small to medium businesses is the labour markets’ current skills shortage resulting from the Covid-19 pandemic. Whilst the Budget didn’t implement direct measures to address this issue, it did make accommodations for:
Supporting small business wellbeing.
- Subsidized childcare to allow parents to return to the workforce sooner
- Decreased pension threshold to allow elderly workers to stay in the workforce longer
- New Jobs Program to address the skills shortage in remote locations
- Skills and training boost allows businesses to deduct a further 20% of employee training costs, making it easier to upskill and retain your current talent
The rising mental health epidemic in Australia has proven to be a major challenge for staff and business owners alike. Thankfully, the 2022 Federal Budget has allocated $15.1 million towards mental health initiatives for businesses and SME’s. These initiatives are in the form of:
Reducing energy costs for small businesses.
- New Access for Small Businesses initiative through Beyond Blue to provide mental health support to business owners through a 6-week program
- Small Business Debt Helpline for access to free, confidential independent business advice
- Promotion and education of mental health awareness to allow businesses to incorporate a top-down approach to mental health in the workplace, creating a healthier workforce and reducing absenteeism and turnover.
With energy costs on the rise, the Budget has committed $62.2 million in grants to support small and medium-sized businesses in upgrading their energy efficiency. These upgrades hope to reduce the energy use of SME’s and keep power bills manageable.
Now let’s discuss what businesses missed out on in the new budget.
No technology boost?
The 20% Technology Investment Boost which was promised by the previous government earlier this year to help businesses with digital adaptation did not get released in the 2022 Budget. This creates yet another hurdle for small businesses to keep up with the evolution of digitization.
Immediate full tax deductions are coming to an end.
Currently, the Full Expensing rule allows businesses to access a 100% tax deduction of eligible depreciating assets. However, this rule has been discontinued in the latest Budget and will be coming to an end 30th
of June 2023. Businesses and SME’s who are looking to take advantage of this should do so before the end of the 22-23 financial year.
Things your business needs to know about
Some other inclusions in the new Budget that will affect your business.
and Cybersecurity Policy and protocol in place.
The Federal Budget 2022 has created clearer guidelines
for businesses and SME’s on previously unlegislated tax and superannuation measures. Additionally, tax digitization is here! This new approach is intended to overhaul how businesses meet tax requirements.
The 2022 Federal Budget has introduced some key changes to the economy that will potentially change how you do business. Overall, there were certainly more win’s for business than there were losses. As always, knowledge is power and adapting to change is the key to any strong business strategy! If you have questions regarding how the economic changes of the 2022 Federal Budget can benefit your business, contact your friendly HR Guru today.
Written by Emily Jaksch