23/24 Federal Budget – what you need to know as a SME business owner 

The Treasurer, Jim Chalmers, has handed down the 2023-2024 federal budget with a raft of measures that will impact small businesses in Australia. The key points you need to know are below:

• Small businesses and households will be eligible for up to $1.5 billion in energy bill rebates. Business rebates will be capped at $650 in NSW, with the amount varying depending on geographical location. Details are still to be announced. A welcome rebate but unlikely to cover the rising costs of power bills for most SMEs. 

• Small businesses that invest in energy-efficient technology will be eligible for up to $20,000 in bonus tax rebates under the Small Business Energy Incentive scheme. SMEs will be entitled to a bonus 20% tax deduction on batteries, solar panels and electrifying their heating and cooling when they invest up to $100,000. Such a scheme will only be attractive to those SMEs with significant levels of disposable cash to make investments in new technology. This is far from the case for many small businesses. 

• Supporting the cash flow of small businesses comes in the form of halving the adjustment factor applied to PAYG and GST instalments – a 6% increase replacing the 12% factor of the current formula. This means you may see a reduction in your PAYG and GST instalments each quarter, but you will need to speak with your accountant about how this will impact your business. 

• Also announced was a new instant asset write-off scheme for purchases up to $20,000 that are first used before 30 June 2024. This is a good news story for SMEs as the previous scheme called Temporary Full Expensing was due to end on 30 June 2023. Remember that end of tax year is always a good time to check on which schemes are ending so that you do not miss out on important tax deductions. Don’t leave it until the last minute though as the schemes tend to require the asset to be in use in the business by the last day of the tax year. 

• Technology Boost and Skills and Training Boost – these both were announced in the March 2022 budget but have yet to be legislated. They also provide SMEs with an extra 20% tax deduction on relevant expenditure up to $100,000. The Technology Boost requires spending to have been incurred prior to 30 June 2023 whereby the Skills and Training Boost extends to 30 June 2024. The Albanese government has indicated its support for both initiatives and it is hopeful they will be passed soon. 

  • The ATO states that portable payment devices, cyber security systems of subscriptions to cloud based services are all covered. Also new laptop and next-generation websites. 

  • For the training and skills package, the training must be external training courses delivered by entities registered in Australia.  

• Another potentially big impact for SMEs is the announcement that all businesses will be required to pay workers their superannuation contributions every payday. This will have significant compliance and cash flow implications for small businesses. However, it should be note that the new rules only come into force in three years’ time, starting on July 1st 2026.  

• Also announced in the budget was $23.4m for the Cyber Wardens Program, launched by the Council of Small Business Organisations Australia (COSBOA), and this is a pleasing step in the right direction of improving cyber security and reducing scams for SMEs. The program will provide Australia’s first cyber safety micro-credential for the small business sector. 

• $392.4m was pledged for start-ups and SMEs from a new Industry Growth Plan, providing grants and mentorship programs to support Australian small businesses commercialise their ideas and grow their operations. The funds will be distributed over four years and will focus on those businesses in the priority areas of the $15 billion National Reconstruction Fund. 

• The federal budget also announced that the ATO will offer a failure-to-lodge penalties amnesty to small businesses with annual turnover of less than $10m. This will apply to outstanding tax statements originally due between 1st December 2019 and 29th February 2022, on the proviso that they are lodged before 31st December 2023. This is part of the push by the ATO to recover more than $30 billion in collectable debts held by the small business sector. Now might be a good time to speak to your accountant about getting your tax affairs in order.  

There was more than the usual amount of change impacting small businesses in the 2023-2024 federal budget. It’s hard for SME business owners to keep up to date with all the changes and this is where a good accounting partner can really help. If you are tired of being over charged for poor service, give Retinue a call and find out how we do things differently. 

Retinue’s payroll service includes the processing of hours and wages rates provided by you. We do not determine award rates for your employees or provide advice on the correct employment status of your employees. It is your responsibility to ensure that your employees are paid correctly and we recommend obtaining advice from specialised employment relations experts.