I have been writing these briefing notes for my small and medium business clients for a while now.  And this has to be the shortest briefing note I have written.  This tells the small and medium business owner, that there is not much in this budget for their business directly.  And what is there is often worse than the offerings under the previous government.

Read below to see the 2023-24 Federal budget announcements potentially impacting your small or medium business.

Small and medium business instant asset write-off

The temporary full expensing introduced by the previous government finishes on 30 June 2023.  For small businesses with annual turnover of less than $10m, this has been replaced with an instant asset write-off of up to $20,000 per eligible asset.  This applies for just one year in respect of assets which are first used or installed ready for use between 1 July 2023 and 30 June 2024.

Note: Assets valued at $20,000 which can no longer be expensed at purchase, can continue to be placed into the small business simplified depreciation pool and depreciated at 15 per cent in the first income year and 30 per cent each income year thereafter.

Small Business Energy Incentive

Small and medium businesses with aggregated annual turnover of less than $50 million will have access to a bonus 20 per cent tax deduction for the cost of eligible depreciating assets, that support energy saving upgrades and more efficient use of energy.  This applies for just one year in respect of assets which are first used or installed ready for use between 1 July 2023 and 30 June 2024, but this is capped at up to $100,000 of total expenditure on eligible assets.

From what I can see, if you spend $20,000 or less per asset and your annual revenue is below $10m you may be eligible for both the instant asset write off and the small business energy incentive.

Energy Bill Relief Fund

The Energy Bill Relief Fund will from July 2023, will deliver up to $325 in electricity bill relief for eligible small businesses from the Federal Government.  Depending on which state your business is in, the state government may match this, doubling the relief to $650.  Eligibility depends on your electricity usage and varies by state.    You don’t need to do anything to apply for this as it will appear on your bill.

Export Market Development Grant

The Government has reduced funding for the Export Market Development Grant by $61m over 4 years from 2023–24.  So the available grants will get even smaller

Industry Growth Program

The Industry Growth Program will support Australian small to medium-sized enterprises and startups to commercialise their ideas and grow their operations.

Details are light but it appears that this will provide advice and matched grant funding from $50,000 to $5m to small to medium-sized enterprises and startups, with the aim of creating a pipeline of quality, investment-ready projects for the National Reconstruction Fund to consider.

Note this program is funded out of the closure of the Entrepreneurs Program.

Cyber Security

The Federal Government will continue to fund the Cyber Wardens program delivered by the Council of Small Business Organisations Australia (COSBOA) to equip small businesses with the foundational skills they need to improve cyber safety.

Lodgement Penalty Amnesty

A lodgement penalty amnesty program is being provided for small businesses with aggregate turnover of less than $10 million to encourage them to re-engage with the tax system. The amnesty will remit failure-to-lodge penalties for outstanding tax statements lodged in the period from 1 June 2023 to 31 December 2023 that were originally due during the period from 1 December 2019 to 29 February 2022.

GDP Adjustment Factor

The GDP adjustment factor is the rate by which the ATO increases your business income tax pay as you go (PAYG) instalments.  The 2023-2024 budget has a statement that for the 2023-2024 tax year, this will be set at 6%, instead of the so called statutory rate of 12%.

But this is actually an increase on recent past. For example, 2022 -2023 this GDP adjustment factor was 2%; 2021-2022 and 2020-2021 it was 0% and for 2019-2020 was 5%.  As far as I can tell, it was only once above 5% in the last 8 years.  So not sure how much cash you will save in the immediate future from this.

International Student Visa Working Hours

If you have International Students working for you, from 1 July 2023 (unless in aged care – this comes into effect on 1 January 2024), their hours are once again capped (they had unlimited hours as a response to covid border closures).  The new cap is 48 hours for fortnight.

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Wayne Wanders, A Real CFO

wayne@aRealCFO.com.au