What is in the 2022-23 budget for Small and Medium Business Owners

The 2022-23 budget was announced last night could be said to be an election budget with cash being given to voters. But how much of that cash will go to small and medium business owners? In all honesty not much. Read below to see the 2022-23 budget announcements potentially impacting your small or medium business

My biggest disappointment in this budget is that it fails to address what I see as one of the major issues facing many small and medium businesses right now. This is the ability to find and retain good quality staff. A simple change to the pension rules for income (where currently for every dollar for a single person on the pension earns above $180, or $320 for a couple, you lose 50 cents of your pension), could have freed up many, many, more people willing to step in and help out small and medium business with their staff shortages.

Fuel Excise

Fuel excise will be cut by 22 cents a litre for the next 6 months. This should reduce pressure on transport costs for your business and your suppliers.

Skills and Training Boost

Businesses with turnover of less than $50 million, will be able to deduct an additional 20 per cent of expenditure incurred on external training courses provided to their Australian based employees. The external training courses will need to delivered by entities registered in Australia. This applies to money spent from 30 March 2022 till 30 June 2024.

For example, if you spend $100, you get a tax deduction of $120. So, the after tax cost of that training (at 25% tax rate) is $70, instead of $75. But when the profits are distributed to the owners, there are fewer franking credits, so the benefit for the individual owner is minimal. Click here to learn about the Boost Smoke and Mirrors in the 2022–23 budget

Technology investment boost

Businesses with turnover of less than $50 million, will be able to deduct an additional 20 per cent of expenditure on business expenses and depreciating assets that support their digital adoption, such as portable payment devices, cyber security systems or subscriptions to cloud-based services. An annual cap of $100,000 will apply. This applies to money spent from 30 March 2022 till 30 June 2023.

Wage subsidies for new apprentices and trainees

The Boosting Apprenticeship Commencements (BAC) and Completing Apprenticeship Commencements (CAC) wage subsidies have been extended to include new employees starting in your business from 1 April to 30 June 2022. Under this scheme you could get up to $28,000 in wage subsidies and you can get the skills and training boost additional deductions for the training costs you may pay.

The Australian Apprenticeships Incentive System (AAIS), then comes into place from 1 July 2022, replacing the BAC and CAC scheme. Under the AAIS scheme, employers can get wage subsidies for apprentices training in priority occupations of up to $15,000 for city employers and up to $21,000 for regional employers. These apprentices can also receive assistance of up to $5,000.

Changes to PAYG

Businesses may get some cash flow relief from changes being made to the pay as you go (PAYG) income tax instalment system. Firstly the PAYG uplift factor between years has been reduced from 10% to 2% for businesses with less than $50 million annual aggregated turnover. Secondly, from 1 January 2024, businesses will be able to modify their PAYG instalments based on actual business performance.

Export Market Development Grant EMDG

For those who applied for the 2021-22 EMDG, the grant funding was severely reduced per applicant. It appears that the government is allocating $80m more to the EMDG scheme, which hopefully results in higher grants for businesses with annual turnover less than $20 million.

Boosting Female Founders Initiative

There will funding for around another 100 applicants through the Boosting Female Founders Initiative program.

Establishment of the Regional Accelerator Program

Establishment of the Regional Accelerator Program to drive transformative economic growth and productivity in regional areas, targeted to local priorities in infrastructure, manufacturing and industry development, skills and training, research and development, and education.

Energy and Emissions Reduction

More funds were announced to support increased private sector investment in low emissions technologies including hydrogen, in affordable and reliable power, and in carbon capture and storage pipeline infrastructure.

Boosting the Modern Manufacturing Strategy

There will be further investment in the Modern Manufacturing Strategy and National Manufacturing Priorities (NMPs) to support businesses in NMP sectors to deliver high-impact projects.

Carry Over from 2021 – 2022 Budget

Also don’t forget some of the announcements in the 2021 – 2022 budget come into effect on 1 July 2022. These include:

Staff earning less than $450 per month will be entitled to superannuation.
The ability to deduct the full cost of eligible new and used depreciable assets of any value, for businesses with turnover less than $50m, has been extended to 30 June 2023 (Temporary Full expensing).
The ability to “carry-back” tax losses against previously taxed profits extended to the 2022-23 year.

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