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Budget wrap: Key takeaways for SMEs

Cost-of-living relief, job creation, and skills development were just some of the headline items in the 2022-23 federal budget.

30 March 2022 

To compensate businesses and families for higher operation and living costs, the budget includes a temporary and targeted cost-of-living package. Fuel excise will be halved for six months which is estimated to save 22.1 cents a litre.

The government also announced a one-off $420 cost-of-living tax offset for more than 10 million low and middle-income earners and a one-off $250 Cost of Living Payment for pensioners, carers, veterans, job seekers, eligible self-funded retirees, and concession cardholders.

Businesses can benefit from the instant asset write-off until 30 June 2023.

“While business has been well served by continued investment to skill our local workforce, slash red tape and enhance digital capability for small enterprises, we are without a long-term agenda for Australia to realise its economic potential,” ACCI chief executive Andrew McKellar said.

“Amid the worst labour and skills shortages in 48 years, and an expected further decline in unemployment to an ultra-low 3.75%, continued investment to skill our local workforce and boost participation will be absolutely crucial to ensuring business can thrive.”

Mr McKellar noted that significant additional funding for a new National Skills Agreement is an important boost and will provide for a valuable increase in the number of training places if it is accepted by state and territory governments.

“With many businesses unable to satisfy the demand for labour, a return to permanent skilled migration to pre-pandemic levels of 160,000 arrivals per year will be insufficient in making up the lost ground over the COVID-19 pandemic,” he added. 

“Regrettably, this year’s budget doesn’t address some of the more pressing challenges facing the Australian economy, including a far-reaching agenda for tax reform, stronger focus on innovation, and building business investment, supply chain capability and productivity.  Presumably, these will have to wait until next year.”

Small business productivity and security

To boost investment in skills and new technology the government has announced:

  • $120 tax deduction for every $100 spent on training employees.
  • $120 tax deduction for every hundred dollars spent on digital technologies such as cloud computing, eInvoicing, cyber security and web design.
  • supporting investments of up to $100,000 per year.

Support for small business

  • A $1.85 billion package of cash flow relief will be provided to small businesses and sole traders. An average business is set to benefit by about $800.
  • $5.5 million to establish a dedicated small business unit in the Fair Work Commission.

Ensuring small business owners can access support

  • $4.6 million to extend Beyond Blue's NewAccess for Small Business Owners program and $2.1 million for Financial Counselling Australia's Small Business Debt Helpline.
  • $8 million to the Australian Small Business and Family Enterprise Ombudsman to work with service providers to offer business planning, capacity building and financial literacy.
  • $1 billion to support small businesses to go digital. Small businesses with an annual turnover of less than $50 million will have access to a new bonus 20% deduction for the cost of expenses and depreciating assets that support digital uptake – up to $100,000 of expenditure per year. 

Boosting sovereign manufacturing capability

The government is investing a further $328.3 million in the Modern Manufacturing Strategy, expanding the patent box tax concession to assist manufacturers to translate good ideas into commercial outcomes and SMEs to innovate and adopt new technologies.

Regional internet services

The government will spend $480 million to upgrade regional internet services, enabling up to one million businesses and households in regional and remote areas to access fixed wireless services for faster internet speeds. This bodes well for regional businesses.

Jobs and skills

The Australian government has provided an additional $365 million to extend the successful Boosting Apprenticeship Commencements (BAC) wage subsidy, which was originally due to end on 31 March 2022, for a further three months until 30 June 2022. It is expected that an additional 35,000 apprentices and trainees will be supported under the extended scheme.

From July 2022 a new apprenticeships incentive system will be implemented. Apprentices and trainees in priority occupations will receive a direct payment of up to $5,000 over two years and employers may be eligible for up to $15,000 in wage subsidies. After real growth in apprenticeships through the pandemic, the new system only targets priority occupations which may risk reducing apprenticeship commencements at a time when skills needs are significant.

Upskilling employees

Businesses with an annual turnover of less than $50 million will have access to a new bonus 20% deduction for the cost of external training courses delivered to their employees by providers registered in Australia.

Additional funding for skills development

There is a $3.7 billion increase in funding to the VET sector (pending agreement with states and territories) and an expansion of the Transition-to-Work employment service, the introduction of the ‘ReBoot’ pre-employment program to provide mentoring and learning experience for young people, and training subsidies for people who want to work in the aged care sector.

International borders and migration

The budget projects positive net migration into Australia. Permanent migrant numbers will remain capped at 160,000.

Support for the workforce

The government will spend $2 billion on booster injections and flu vaccines to slow COVID infections and prepare for the first significant flu season in three years.

Childcare and pre-schooling

Childcare subsidies will be increased and brought forward, and more children will be provided with access to 15 hours of preschool a week.

Apprenticeship Support Australia

The Apprenticeship Support Australia team offer free over the phone advice and online tools to help you find, register, onboard and manage an apprentice or trainee in your business.

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