2022-23 Federal Budget: 10 Things Merchants Need to Know

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 .

Now's the time to invest in upgrading your tech tools and training staff. The 2022-23 federal budget announcement delivered several wins for merchants. Two of the new measures enable businesses that spend on employee training or tech tools to claim a deduction greater than the actual cost — meaning there’s never been a better time to invest in the growth of your business. A new Skills and Training Boost has been introduced in response to critical labour shortages across the country, while technology incentives will enable merchants to upgrade or expand their tech stack. Keep reading to find out more about these temporary tax deductions, and how you can make the most of the new measures to grow your business. Small Business Technology Investment Boost Are your business’s current tech tools helping to streamline processes, remove double handling, and improve the customer experience? It’s likely there’s room for improvement. For many merchants, searching for new tools and software is a task that gets pushed to the end of the to-do list. The new Small Business Technology Investment Boost is designed to nudge merchants to spend on digital tools and software — such as portable payment devices , cloud computing, web design, e-invoicing and accounting. It’s been introduced to help future-proof businesses, and has the potential to accelerate growth after a difficult few years of trading. With the introduction of this measure, merchants can claim an additional 20 per cent deduction for the cost of expenses and depreciating assets up to a maximum of $100,000 per year. It's a ‘bonus’ deduction because it applies on top of the deductions already available to businesses. Here’s how it works: Make an eligible purchase Claim the deduction in your next tax return Any expenses over the $100,000 cap can be claimed as per usual tax processes. The bonus deduction applies to purchases made between 7.30pm on March 29, 2022 and June 30, 2023. Skills and Training Boost The Skills and Training Boost is another measure designed to give small businesses a helping hand by encouraging merchants to train new employees, and upskill existing staff. What that means is that for every $100 eligible businesses spend training employees, they will receive a $120 tax deduction. It’s a win-win. Giving employees the opportunity to take part in training opens up opportunities to take on more responsibilities and grow their role, creating more value for the businesses that they work for. For businesses, upskilling staff will help to bridge gaps in the workforce and circumvent the sky-high costs to attract and train talent in the face of significant labour shortages. What’s the catch? Two conditions have been announced so far. The training cannot be in-house or on-the-job. It must be provided by an external organisation. Courses can be provided in person, anywhere in Australia, or online — so long as that external organisation is a company registered within Australia. The Skills and Training Boost came into effect on March 29, 2022 at the same time as the Small Business Technology Investment Boost, and will extend until June 30, 2024. Both the Small Business Technology Investment Boost and the Skills and Training Boost are available to businesses with an aggregated turnover of less than $50 million a year. More conditions will likely apply when legislation is enacted, so stay tuned.

COVID-19 has drastically changed consumer behaviour. Here's what you need to know. Australian business owners have shown incredible resilience throughout 2020, and the first half of 2021. Faced with lockdowns, capacity restrictions, and a constant sense of uncertainty, many have had their hands full simply trying to keep out of the red. Yet while it’s clear the 2021-22 financial year will be another year of transition, there is light at the end of the tunnel. A number of business trends have emerged over the past few months, shaped by fast real-time consumer preferences and behaviour. While we cannot know with total certainty what the next financial year holds, you can be prepared to embrace the changes. Understanding how the economic environment has shifted is key to navigating your business through the pandemic, and beyond. In this article, we deep dive into five of the emerging business trends identified by the world’s biggest consulting firms. Each of these trends will have a ripple effect across the small to medium business sector. Keep reading to discover how you can capitalise on these trends and implement practices that will benefit your bottom line. 1. Revenge spending As consumer confidence returns, so too will spending. “Revenge spending” has emerged as a new term for a post-lockdown cash splash. The term, first used to describe the increase in retail spending in China last April , is defined by the Collins Dictionary as: “Spending excessively after a period when one has had limited opportunities to spend.” It makes sense; consumers have spent the last eighteen months saving a disproportionate amount of their income. Now, after more than a year of lockdowns, quarantines, business closures, and restrictions, those same consumers have a pent-up desire to spend. 41% of Australians saved more than usual in 2020. This trend isn’t new — economists have reported an increase in spending after every financial crisis. The difference, however, is that this particular economic downturn particularly affected the services industries. Unlike other periods of financial crisis in history, those involved in the running of a services-based business have been restricted from carrying out their jobs. A service cannot be purchased online, ordered through click-and-collect, or delivered via UberEats. Government restrictions have prevented plumbers, electricians and other trades from entering people’s homes, effectively putting a stop to business. For this reason, it’s likely we’ll see revenge spending across all industries for the first time — as consumers spend big on dining, retail, entertainment, home improvements and more. Tim Finocchiaro, Managing Director of Pavers Plus — one of Victoria’s largest independent paving and landscape suppliers — has already noticed a shift in where Australians are spending their money, and it’s close to home. “Last Spring was pretty tough, with Victoria's lockdowns, and Spring is usually our busiest period. But the Australian life is an outdoor life, and now with programs like The Block people are being exposed to all sorts of new designs. We’re seeing a lot of demand for pool tiles at the moment – people are thinking, ‘If I can’t spend money on an overseas holiday, I’ll spend it on a pool’,” Tim says. "We're expecting to see the economic benefits this financial year, as Australians reinvest in their homes.” How businesses can benefit To cash in on consumers’ willingness to spend big, consider which elements of life your customers have missed most throughout lockdown and how your business can adapt to provide those things. The most obvious example is communal experiences. To meet this need, book stores could invite an author to read in-store. A games retailer could put on a magic show, or host an in-person chess competition. Restaurants and cafes could offer group packages such as high tea, or themed dinners with entertainment. Of course, with group bookings comes the headache of bill-splitting. This is where having the right tools for the job can save a lot of time, and help to provide an exceptional customer experience that leaves a great taste in diners’ mouths. 2. Conscious consumerism Conscious consumerism — sometimes referred to as ethical consumerism, green consumerism, or sustainable consumerism — is a commitment to making purchasing decisions that have positive social, economic, and environmental impact. These terms are no longer buzzwords; conscious consumerism is an effective (and arguably necessary) business strategy. We know with certainty that younger generations are actively spending at businesses that share their own values. The public shunning of fast fashion producers and the growth in demand for farm-to-table hospitality are examples of this shift, albeit from opposite ends of the spectrum. In fact, a recent survey found that nine in ten Australian consumers are more likely to purchase products that are ethically or sustainably produced. And they’re not just settling for “eco-friendly” labels — 87% want to see greater transparency around what makes a business’s products sustainable. But it’s not just a trend we’re seeing on our own home soil — sustainable business is an international phenomenon. A global study by Oxford Economics reported that 82% of SMEs who introduced ethical and sustainable practices saw a 15% increase in financial performance the following year. People spend more with conscious businesses. How businesses can benefit Consumers are more environmentally and socially conscious than ever before, and expect the brands they buy from or use to take responsibility for their impact. It’s no longer enough to not know where your products come from, or the conditions under which they’re made. Consumers are looking for greener alternatives and transparent supply chains. Now is the time for every business to rethink its operations and environmental impact. First,  read our blog to discover five ways to make your business more sustainable, work out where you can make changes and — if it makes good business sense — implement them publicly. With the significant supply chain disruptions brought about by COVID-19, it’s an ideal time to hit the reset button and make changes to run your business more sustainably. 3. Local love The silver lining of physically restricting consumers to within a few kilometers of their homes is that local businesses have been put in the spotlight. In 2020, consumers saw the effect of the pandemic on their local barbershop, fruit market, gift shop, and more. The shift to remote work kept (and continues to keep) many workers in suburbs and regional areas, providing more opportunity to discover local shops, cafes, restaurants and other businesses. Now, with many shuttered still, consumers say they will be taking action to support homegrown businesses. A recent survey by CouriersPlease found that 4 out of 5 Australian shoppers — an overwhelmingly large proportion — say they would be proactively supporting small and local businesses over big, global brands throughout 2021. It’s clear the “shop local” trend is likely to continue in 2021-22 and beyond. How businesses can benefit This shift presents challenges for larger brands, such as department stores. However, small businesses can capitalise on this by reminding consumers that spending locally doesn’t have to mean more money, or less convenience. It could be something as simple as showing support for other local businesses, or sympathy for those doing it tough. If you’re in a position to, it could be an extended returns policy or offering a payment plan. Depending on the type of business you run, joining forces with other local business owners might be beneficial. For example: A cafe shop could invite the local florist to place a few arrangements for sale by the register, and in exchange the florist might keep some of the cafe’s business cards at the front counter. A local grocer and gift store could team up to create and sell hampers, with an emphasis on local produce and products. A homewares store could invite the local coffee cart to sell coffees at its EOFY sale event. Read our blog , Shop Local: How You Can Benefit From This Growing Trend, for five easy-to-implement tips to attract more local customers to your business. 4. Authenticity on social media These days, it’s not just e-commerce businesses that need to be active online; bricks and mortar businesses need to have a social media presence. However, consumers’ increasing reliance on social media does not necessarily mean that it’s any easier for businesses to connect in a meaningful way. For the last 18 months, social media has been a lifeline for many — providing people with the means to connect with one another, and businesses with a platform to reach their target audience. Yet countless studies show that a growing reliance on technology rather than face to face interaction is causing an overwhelmingly large proportion of people to feel isolated, disconnected and lonely. In fact, the problem is so pervasive that at least one scientist is working on a pill to try and alleviate it. As a result, businesses need to think outside the curated box and utilise social media in a way that makes their audiences feel connected. In 2020-21, a number of brands saw the opportunity to strengthen community ties through an authentic social media presence, purposefully designed to connect with and engage their audience. There were giveaways, collaborations, behind-the-scenes content, live videos and more. This authentic content helps forge a deeper connection with customers, which in turn encourages brand loyalty. As communities continue to be affected by lockdowns, this type of marketing should be an important part of any businesses social media strategy in 2021-22. How businesses can benefit Being authentic means being real and genuine. An authentic brand is one that understands its audience and their values, and aligns itself accordingly. This is especially important for businesses operating in a saturated marketplace; consumers will often choose to spend money with the brand they feel most connected to. One of the most important steps to creating an authentic brand is deciding its values. Decide what your business stands for, then audit your website, social media presence and in-store experience for any discrepancies. When it comes to social media, imperfect content, live content, and user-generated content should be prioritised over overly photoshopped or curated content. One of the most authentic pieces of content you can create is a peek behind the scenes, introducing the people that make your business what it is— whether that’s the chef, the jeweler, the barista, the locals, or even their dogs. Whatever you choose to post, it must reflect the ethos of your business’s brand in an authentic way. 5. Business model innovation Crisis typically spark a wave of innovation, and the COVID-19 pandemic has proved no different. 2020 was a year of business model innovation. This financial year, the focus will be on refinement. In the face of lockdowns and restrictions, many businesses were forced to adapt their strategy in order to stay afloat. Hospitality and events-based businesses were especially affected. The businesses that thrived were those that were able to react quickly to the changed environment. For example, restaurants that pivoted to enable finish-at-home experiences through the likes of Providoor, or in-person events that shifted to online. Bill Spathis, co-owner of Melbourne-based Decoy Cafe Coffee Roasters, was quick to adapt when the city came out of lockdown. With fewer office workers dropping by for their morning brew, Decoy Cafe's menu shifted to align with its new clientele. “We usually operate à la carte, but we’ve had to change our business model because our customer base is different now. People aren’t coming back to the city for work just yet —  but they’re building a hotel across the road, so there are lots of tradies,” Bill said. “We’ve installed a bain marie for dim sims, fries and the like — and that’s what’s saved us. Without the tradies, we’d be closed.” Although businesses have always had to think about how the market is changing and what that means for their product or service, business model innovation will be more important in 2021-22 than ever before. The key to success this financial year will be refining the strategies that allow your business to continue generating revenue even when consumers cannot physically visit your business, or engage your services. How businesses can benefit Every business should have a crisis plan by now. In fact, it should be a part of every business plan ; no one can say, with complete certainty, what this financial year or the next holds. Businesses need to plan in advance how they will adapt in the face of a lockdown. Retailers should know how a lockdown will affect their returns policy, and trades businesses ought to have a communications strategy in place to reschedule appointments, for example. Every business should invest in an EFTPOS terminal that allows them to accept payment, even when customers cannot come to the store. This will help ensure business can continue as normal, as much as possible. However, the businesses that continue to grow in these times are those that innovate their business model. Gift cards, online tutorials and take-home packs are all examples of monitisable, COVID-safe strategies. If these changed business models make sense – customers enjoy the changed offering, and it’s a profitable direction for the business – there’s no reason to go back to the way things were. Business owners should always look for opportunities to drive revenue and generate new opportunities as the economy recovers. Embrace the opportunity The COVID-19 pandemic has changed the business landscape, however life beyond the pandemic holds promise. Overall, the 2021-22 financial year looks like it will be a year of optimism, recovery and opportunity for business owners. As the months roll on, additional trends will emerge that further shape the business landscape. It’s up to business owners to decide how to adjust their tactics in response. 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