How the 2021-22 Federal Budget impacts your business

From immediate tax deductions to energy rebates, and mental wellbeing support, here’s what this year’s budget means for you and your business. Running a business is tough at the best of times, but when cost-of-living pressures chip away at consumer spending and inflation increases your supply costs, it can start to feel like an uphill battle. For the last eighteen months, this has been the sentiment for many of the 2.5 million small business owners across the country, with a good number hoping that this year’s federal budget would provide some much-needed relief. Indeed, the budget, handed down by Treasurer, Jim Chalmers, on Tuesday 14 May does offer some short-term respite, notably in the form of an extension to the instant asset write-off program, $325 energy rebates, and an abolishment of 457 nuisance tariffs. In addition, small businesses will benefit from funding for programs dedicated to mental wellbeing, cyber security, innovation and more. Keep reading to discover what the new measures mean for your business. 1. $20,000 instant asset write-off program extended. The government’s instant asset write-off program – which has seen various iterations since it was first introduced in 2015 – is being extended for another year. This measure allows business owners to invest in their growth by claiming an immediate tax deduction after buying a new piece of equipment – a vehicle, a coffee machine, or an  EFTPOS machine  for example. Small businesses with an annual turnover of less than $10 million will be able to immediately deduct eligible assets costing less than $20,000 until 30 June 2025. However, this good news does come with a caveat. For those who remember,  last year’s budget  did promise the same thing. The legislation, however, is still yet to be passed. If the government fails to pass the relevant legislation from last year’s budget before June 30, 2024, small businesses will miss out on this important cashflow support when they lodge tax returns from 1 July. We recommend keeping an eye on the news over the coming weeks to stay up to date on the matter. 2. Tax cuts to provide cost-of-living relief to all Australians: an average of $36 a week. The Labor government’s signature tax policy, which was announced earlier this year, and will come into effect on July 1, is designed to alleviate cost-of-living pressures on Australian households. While the tax cuts will bring some respite to all 13.6 million Australian taxpayers, the Labor government’s redesign will direct more benefit to low- and middle-income earners, compared to the Morrison government’s proposal, which skewed more heavily towards those with higher salaries. On average, Australians will be receiving a total tax cut of $1,888 or $36 a week. By relieving cost-of-living pressures, this measure will help positively impact, spending, confidence, and potential revenue for small businesses. 3. $325 energy rebates for eligible small businesses. The Russian invasion of Ukraine has had a ripple effect on energy prices across the globe, sending them skyrocketing. Once again this year, the government has stepped in to help with its Energy Bill Relief Fund which will provide energy rebates to each of the approximately one million businesses on small customer electricity plans to help cover their bills. From 1 July 2024, eligible small businesses will receive $325 on their electricity bills throughout the year. Additionally, the government is providing $1.8 million to progress regulatory reforms to retail energy markets that will support consumers experiencing hardship and ensure small businesses are on electricity contracts that work better for them. 4. Free mental health coaching for small business owners. The last few years have not been easy on business owners, and if it’s taken a toll on your mental health, you’re not alone. Thankfully, this budget is investing a further $10.8 million to deliver tailored, free, and confidential financial and mental wellbeing support for small business owners through the  NewAccess program . This program has been developed by Beyond Blue to give small business owners support during challenging times. Eligible for any business owner aged 18 and over, the program offers six sessions with a coach to help overcome difficult issues and manage stress. Additionally, the government will be extending the  Small Business Debt Helpline , a national, free and confidential phone-based counselling service that offers advice to small business owners struggling with their business finances. 5. Slashed import tariffs to reduce administrative burden for businesses. Whether you’re importing toasters, toothbrushes, or tools, you’ll be glad to know that your compliance costs have just gone down. The government has eliminated 457 ‘nuisance tariffs’ to simplify the trade system and cut down the administrative burden, especially for small businesses. Historically, these tariffs were introduced to protect Australian producers, however as the name suggests, they have become more of a nuisance than a benefit as most of the goods imported under these tariffs were already eligible for existing tariff preferences or concessions, yet they still required business owners to apply for them. Tariffs will be eliminated on imported goods such as toothbrushes, hand tools, fridges, dishwashers, clothing, and menstrual and sanitary products. 6. Funding to build cyber resilience for businesses. It’s not just the likes of Optus and Medibank that fall victim to cyber attacks, hundreds of small businesses around Australia are targeted by hackers and scams every year. This year’s budget sees continuing support for a number of programs introduced to help bolster cyber security among Australian small businesses. The  Cyber Wardens program , and the Small Business Cyber Resilience Service will receive a combined $34.5 million to educate small businesses about cyber threats and practices to adopt to keep their businesses safe. An additional $7.2 million will support the Cyber Health Check – an online interactive tool that enables small and medium businesses to self-assess their cyber security maturity. 7. Assistance for small businesses to win government contracts and expand internationally. In a bid to help small and medium businesses win more government contracts, the government has updated the Commonwealth Procurement Rules to significantly increase the number of SMEs that can participate, and is improving  AusTender  to make it easier to identify small and medium businesses on government panels. Similarly, the  Buy Australian Plan  will also open its doors to government work for more small and medium businesses by simplifying and decoding procurement processes. Additionally, the government will invest $183.8 million in defence industry grants to support Australian small and medium businesses, including a program to reduce the administrative burden on SMEs and provide greater opportunities for tailored financial support. Plus, to help Aussie businesses expand abroad, the government is committing $10.9 million to the  Go Global Toolkit  online platform. 8. $392.4 million in grant funding to support business innovation. To help innovative Australian startups and small businesses get off the ground, the government is committing $392.4 million to the  Industry Growth Program  to help commercialise their ideas and grow. The program supports businesses that are working within the government’s priority areas, and developing Australia's future manufacturing capability. Businesses can apply for grants of $50,000 to $250,000 to support early-stage commercialisation projects and $100,000 to $5 million for commercialisation and growth projects. An additional $18.6 million is going to the  Digital Solutions  program to help small businesses embrace the opportunities of digital tools including eCommerce, digital marketing, or  online invoicing . 9. Support for education and training to address the labour and skills shortage. Your output is only as good as your staff, but Australian businesses are being hampered by a critical shortage of skilled labour. To help address this, the government is providing funding to a number of programs that will expand access to education and training, including an $88.8 million investment to provide an additional 20,000 fee-free TAFE places in courses relevant to the construction sector. This is on top of the additional 300,000 fee-free TAFE places made available from 2024 to 2026 in areas of priority skills. $1.8 million will also be delivered to streamline skills assessments for around 1,900 migrants to work in Australia’s housing construction industry and $21.9 million will go to support social enterprises and employers that engage job seekers through paid employment placements of up to six months. 10. A fairer playing field in the franchising sector. The government has committed $3 million to implement recommendations that were laid out in the 2023 Schaper Review of the Franchising Code of Conduct, a landmark review into Australia’s franchise law. The franchising sector, which comprises thousands of small businesses and contributes more than $135 billion to the Australian economy each year, will soon see an updated set of regulations. The improved code will promote best practice conduct between franchisors and franchisees and make it easier for small businesses to operate in the sector including through better access to dispute resolution. What did you think of this year’s budget? Share your thoughts with us on  Facebook ,  Instagram ,  Twitter , or  LinkedIn . And don’t forget to sign up to the Zeller Newsletter to receive more small business news, tips and stories straight to your inbox. To find out more about how this year’s federal budget impacts small businesses, refer to the small business fact sheet .

From energy savings to asset write-offs and cyber security, here’s what this year’s budget means for you. A cost of living crisis and record-high inflation are the two resounding forces at play in this year’s conservative budget, handed down by Treasurer Jim Chalmers. In a bid to deliver some relief without adding to inflationary pressure, the government has announced a number of policies that will help Australian small businesses weather the storm. However, they’re far from the cash-splashing measures that helped merchants through the Covid19 pandemic. With annual inflation sitting at 7%, the budget naturally does very little to incentivise high consumer spending, but for many who expected the belt to tighten more than a few notches, there were some pleasant surprises in store for small businesses. Remarkably, the instant asset write-off has been extended once more, enabling small business owners to write off the cost of assets invested in growing their operations. Additionally, an energy bill relief plan, a tax break for investing in energy-efficient systems and an impressive $392.4 million program to get SMEs and startups off the ground will make it much easier for businesses to prosper on their own amid a difficult economic climate. Improving cash flow, mitigating cyber threats and slashing red tape, are also on the agenda to reduce pressure, while working hour caps for international students and increased costs to Visa applications could reduce the talent pool and make staffing even more challenging. Keep reading to discover what the new measures mean for your business. 1. $20,000 instant asset write-off program extended Ongoing supply chain issues in conjunction with record-high inflation have created the perfect storm for astronomical expenses for small businesses. In a move to help ease the pain, the government has extended its full expensing scheme — a measure that many thought was about to come to an end. Whether you’re looking to invest in a new coffee machine, a lighting or sound system, or technology to improve cash flow like a Zeller Terminal , this scheme lets business owners immediately write off the cost of purchasing new assets. Up to 3.8 million small businesses with annual turnover of less than $10 million will have the chance to invest in their operations by immediately deducting purchases under $20,000 from their tax bill. Note that to be eligible, purchases must be installed and ready for use between July 1, 2023, and June 30, 2024. 2. Cash flow relief for small businesses To help small businesses operating on tight profit margins, the federal budget has introduced a new way of calculating the increase of Pay As You Go (PAYG) and GST payments. Instead of applying the planned 12% adjustment factor, quarterly income tax and GST payments will only increase by 6%. The government says that this new measure better reflects the economic conditions currently faced by the sector and strikes a balance between improving cash flow for small businesses and managing income tax and GST liabilities. There are some 2.1 million small businesses in Australia that will benefit from this new scheme. 3. Handouts to help pay for power bills Since Russia’s invasion of Ukraine, energy prices have risen astronomically. The government will therefore be delivering up to $3 million in electricity bill relief for small businesses. Although it is unclear how this will be allocated, the plan will hand out up to $650 for eligible businesses to help pay their power bills. 4. Savings for investing in energy-efficiency This year’s budget will help businesses install more sustainable solutions, curbing energy use and slashing their power bills into the future. The Small Business Energy Incentive will give small businesses a tax break of up to $20,000 for investing in energy-efficient systems. Swapping out fossil fuel energy and technology for batteries, electric heating and cooling and appliances such as fridges will amount to $310 million in tax relief for up to 3.8 million businesses. A 20% bonus will be handed out when you spend up to $100,000 in next-generation, energy-efficient technology. 5. A cyber security scheme to protect your business If you’ve been receiving an alarming number of unsolicited calls and text messages recently, you’d be right to think that data breaches are becoming disturbingly prevalent. And while the digitalisation of small businesses brings many new opportunities, it also increases their vulnerability to cyber attacks, which is why the government has introduced a new scheme to help protect themselves. This new $23.4 million program — delivered by the Council of Small Business Organisations Australia (COSBOA) — will help small businesses build resilience to cyber security attacks by training in-house cyber wardens. 6. A $392 million growth program to get your ideas off the ground Under a scheme that recognises the important contribution that small and medium-sized enterprises make to the Australian economy, the budget announcement unveiled its flashy $392.4 Industry Growth Program. Designed to foster a fertile landscape for innovation and strengthen home-grown startups, this program will provide financing to help commercialise business ideas and grow their operations. The grants will give a welcome boost to any emerging businesses and help them provide future employment opportunities into the future. 7. Funding to increase apprenticeship completion rates and gender diversity Spurred on by a shortage of skilled workers and a lack of diversity in the apprentice workforce, the government has announced that it will provide an additional $54.3 million over five years to fund key services that will increase completion rates and support women in historically male-dominated trades. Businesses committed to creating a more inclusive workforce will have access to $5 million in grant funding to seek education and advice around addressing workplace challenges for women. 8. Making lucrative government contracts available to small business When it comes to securing government contracts, Australian small businesses have often been sidelined in favour of bigger competitors. In a bid to further support the growth of Australian industries, provide more diversity in our supply chains and invite innovation, the government is using its significant buying power to channel money back into local businesses. It’s doing this through the ‘Buy Australian Plan’, a scheme that will allocate $18.1 million to help businesses compete for tenders, update the AusTender system and increase transparency around government contracts. 9. More barriers to entry for international workers If your business relies heavily on workers hailing from abroad, there’s some bad news in store. The cap on working hours for international students, which was abandoned during the Covid-19 pandemic to mitigate staffing shortages, will be reinstated from 1 July 2023. It will, however, be increased by eight hours per week, lifting the cap to 48 hours per fortnight. Additionally, the government has flagged a 40% increase in the fees associated with Visa applications, making it increasingly difficult to hire from the international talent pool. For startups trying to attract tech professionals — such as engineers, or product managers — this announcement risks compounding the hiring challenges already faced by Australian businesses, especially in the technology sector. 10. Funding to help reduce the burden of tax compliance Business owners already have enough to juggle, let alone having to manage the administrative hurdles associated with employing staff, engaging contractors, and tax compliance. The government will therefore be providing $21.8 million over four years to the Australian Taxation Office (ATO) to cut paperwork and lower the administrative burden for small businesses. The measures include an ATO lodgement amnesty for businesses who declare tax debts dating back to the Covid-19 pandemic, an independent review for small businesses in dispute with the ATO, and increased access to tax advice and assistance. Additionally, small businesses will now have up to four years to amend their income tax returns. But reducing the red tape isn’t just about letting small businesses off the hook, on the contrary, these new measures are designed to reign in possible rulebreakers and promote tax compliance. What do you think of this year’s budget? Broadly speaking, small businesses have come out relatively unscathed in this year’s federal budget. In the weeks leading up to the announcement, there was much speculation around how the government would strike the balance between curbing inflation while easing the cost-of-living pressure for everyday Australians. While the economic forecast still doesn’t look great, the budget outcome could have been much worse for small business owners. But we’d love to know what you think! Share your thoughts with us on Facebook , Instagram , Twitter , or LinkedIn . And don’t forget to sign up to the Zeller Newsletter to receive more small business news, tips and stories straight to your inbox.

Looking to hire, upskill staff, or purchase new tools? You're in luck. In the weeks leading up to the official announcement, there has been mounting pressure on the government to consider more targeted measures aimed at helping business owners. Although the 2021-22 Budget tackled some key areas of concern, the Omicron variant had not yet reached Australian shores. Since then, many capital cities and surrounding areas have suffered through extended lockdowns — once again shuttering businesses, and slowing economic recovery. With the added pressure of widespread supply chain issues, the rising cost of living, natural disasters, a significant lack of staff, and low consumer confidence, it’s been a difficult couple of years for businesses in particular. There’s been a lot of cash splashed recently, and it’s left a dent. Australia is currently sitting on some of its highest debt levels in history, and the debt forecast is set to hit $1 trillion in 2023-24. Although Treasurer Josh Frydenberg forewarned that this year’s Budget would curb some spending, the government appears to have recognised that now is the time to prioritise economic recovery over debt repayment. Keep reading to discover what new measures will be introduced, which existing schemes will be extended, and what the impact is on your business 1. A new system for apprentices Looking for an apprentice chef? Or a trainee hairdresser, or an apprentice plumber? Now’s the time to hire. The Boosting Apprenticeship Commencements wage subsidy scheme, a program that supports employers of any size to take on new apprentices or trainees, has been extended to the end of this financial year. Any employer who takes on an apprentice or trainee (under an approved training contract) on or before 30 June 2022 can gain access to: 50 per cent of the eligible Australian Apprentice’s wages in the first year (capped at $7,000 per quarter) 10 per cent of the eligible Australian Apprentice’s wages in the second year (capped at $1,500 per quarter) 5 per cent of the eligible Australian Apprentice’s wages in the third year (capped at $750 per quarter) It’s a move expected to support 35,000 extra apprentices and trainees, shoring up our local skills pipeline and getting more people into work. Importantly, the program can be used to employ retrenched apprentices and trainees who lost their job due to the pandemic. When the financial year ends in June, the scheme will be replaced by the newly announced Australian Apprenticeships Incentive System, which will subsidise the wages of trainees in priority fields by up to $4,500. Under the scheme, priority apprentices will also receive $5,000 in training support payments. In-demand, “priority” fields are as yet unclear. However, a new Australian Apprenticeships Priority List will be created and expanded upon annually — so stay tuned. 2. Deductions for digital tools Looking to upgrade your digital skills and tools? Businesses with annual turnover of less than $50 million will be able to claim a 20 per cent deduction on the cost of workplace expenses that support their digital uptake — think e-invoicing, accounting, web design, and cloud computing. The deduction will apply to any purchases made between 7.30pm on March 29, 2022 and June 30, 2023, up to a limit of $100,000 in expenditure per year. 3. Tax cuts for employee training Small business owners will also be able to deduct an extra 20 per cent of expenditure on external training courses under the new Skills and Training Boost — a move that has the potential to upskill approximately 7.8 million Australians employed by eligible businesses. What this means in effect is that for every $100 a small business spends on training its employees, it will get a $120 tax deduction. There are conditions, of course. In-house or on-the-job training is ineligible, for example — the courses must be run by registered training entities. Keep an eye out for more details, when they become available — this is a measure your employees will want to know about, too. 4. Instant asset write-off extension In the lead-up to this year’s budget announcement, industry groups have made no secret of the fact that ongoing supply chain issues have pushed the cost of new purchases higher and added considerable delays to shipping times. Yet in a move designed to encourage spending, the temporary full expensing scheme has been extended once again. The instant asset write-off scheme’s eligibility criteria was dramatically expanded in 2020, and last year’s budget extended the scheme to apply. After the most recent budget announcement, business owners can now claim the write-off on eligible assets first used or installed by June 30, 2023. The scheme, which allows businesses with a turnover or income of less than $5 billion to immediately write off the cost of purchasing new capital items, has been credited with causing a spike in equipment like tractors and utes. If you’re considering a new business purchase, now’s the time. 5. Changes to PAYG Many merchants that pay the Australian Taxation Office a portion of their expected tax liability have typically been subject to a 10 per cent uplift rate. The government will reduce that rate to 2 per cent for the 2022-23 financial year, significantly reducing the buffer for scheduled payments. It will also be easier for businesses to get refunds on instalments. In the event business performance declines and tax liability is reduced, merchants may be able to get refunds of instalments paid immediately. It’s a move projected to provide cash flow support to around 2.3 million small-to-medium businesses and sole traders. 6. Ripping up the red tape The government has announced a ream of measures to ease the impact of regulatory red tape  on business owners. From January 2024, businesses will be able to automatically report taxable payments via software at the same time as activity statements. Meanwhile, the government will be developing systems to ensure all trusts in Australia will be able to lodge income tax returns electronically from July 1, 2024. These changes will significantly reduce the administrative headache for business owners, minimise errors and speed up processing times. Fuel and alcohol importers and distributors with an annual turnover of less than $50 million will be able to lodge and pay excise and excise-equivalent customs duty on a quarterly basis from July 1, 2023. 7. Hiring subsidies for seniors with disabilities Employers that hire seniors with a disability will be eligible for subsidies of up to $10,000. The package, which comes at a cost of $44 million, is intended to incentivise businesses to broaden their workforce. Given the chronic staff shortages faced across the country, it’s a measure that could tackle two birds with one stone: helping to alleviate some of the pressure on business owners, while growing and diversifying the workforce. 8. Temporary cost of living measures Around 6 million Australians will be eligible for a one-off payment of $250 to meet the rising cost-of-living pressures. Most of those who will receive the payment are pensioners, but some carers, veterans, job seekers, self-funded retirees and concession card holders are also eligible. Recipients will have the one-time-only payment deposited into their bank accounts in April. The rate of fuel duty has also been slashed in light of the astronomical rise of petrol prices. Bowsers in several markets across Australia have recently been set above $2 a litre, adding considerable pressure to motorists.  For six months, the government will cut the fuel excise — the flat tax levied on each litre of fuel — in half. Mr Frydenberg says this spells average savings of 22 cents a litre, which is good news for all motorists (and great news for mobile business owners). 9. An extension to the LMITO The low to middle income tax offset (LMITO) has been extended for another year. Individuals already receiving the offset will get up to $1500, and couples will receive up to $3000 in their 2021-22 tax returns. The offset, which was originally due to end at the close of this financial year, will be welcome relief for approximately 10 million Australians who will also receive a one-off $420 cost of living tax offset. 10. A regional telecommunications overhaul The government has pledged $18 billion for the investment pipeline, which includes more than 20 new and existing road and rail projects across the country. In good news for regional businesses, $1.3 billion will be spent improving telecommunications in regional areas — meaning businesses should face fewer and fewer disruptions from outages, and have better backup in the event of natural disasters. What do you think of this year’s Budget? Given the election’s proximity, this year’s Budget was not expected to rock the boat. Fewer new regulatory measures were introduced than usual, which will give merchants breathing room to focus on the challenges posed by the current business climate. However, the coupling of new measures designed to support the digital transformation of small businesses, additional tax cuts for staff training, and a further extension of the instant asset write-off will be welcome news to many. Depending on your industry, there could be some changes to put in place. Now’s the time to look at hiring an extra set of hands, upskilling your staff, and seriously considering whether there are business purchases you could make to help grow your business. For those with staff, remember superannuation will once again rise on 1 July 2022. Let us know what you thought of this year’s Federal Budget on Facebook , Instagram , or LinkedIn . To fully prepare your business for the impact of this year’s Federal Budget, schedule time to speak with your accountant or financial advisor. Please note this article is for educational purposes only. Zeller does not accept responsibility for the accuracy of the information presented in this article.