Everything in the budget for small businesses
What small businesses need to know about the 2022 Federal Budget.
Josh Frydenberg handed down the Federal Budget on Tuesday.
Australia’s economy has rebounded well since the pandemic, with a robust labour market and strong GDP growth.
But there are still plenty of challenges ahead, Russia’s invasion of Ukraine, the ongoing pandemic, skills shortages, and rising inflation pressures all present risks to families and businesses.
For the business community, here are some of the key takeaways from this year’s Federal Budget you need to know:
Wage subsidies to boost apprenticeship uptake and employee retention
The government has pledged $2.8 billion in funding for an overhauled apprenticeship incentive scheme, promising to grow the ranks of qualified tradespeople by subsidising the wages of apprentices and trainees in ‘priority fields’.
The new ‘Australian Apprentices Incentive System’ will replace the current 50 per cent wage subsidy scheme (BAC).
Employers will be eligible to claim up to $4,500 in the first year of the system.
Apprentices in high-demand industries will get up to $5000 in cash payments for the first two years of their training
Support for small businesses to adopt new digital technology
The government has pledged $1 billion to help businesses go digital.
Small businesses will be able to deduct a further 20 percent ($120 for every $100 they spend) from the cost of digital adoption technologies, such as cloud services and cyber security systems.
Businesses with an annual turnover of less than $50 million will be able to claim the discount on expenditures up to $100,000.
Websites, cloud computing and portable payment devices are amount the eligible expenses businesses can claim.
Shoutout to our IT & Cyber partner: ShadowSafe
Changes to PAYG calculations to improve small business cashflow
The government is proposing changes to the way Pay As You Go (PAYG) instalments are calculated will help small business improve their cash flow.
The GDP ‘uplift’ rate used to calculate quarterly PAYG/GST instalments is proposed to change to 2% for the 2022-23 financial year—currently at 10%.
This change will help around 2 million small businesses and sole traders, freeing up an estimated $1.85 billion in collective cash flow to allow them to invest in other areas of their businesses.
Legislation would need to be passed in Parliament in order to introduce the change.
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More flexibility and expanding the eligibility of Paid Parental Leave
The federal government is merging the two-week Dad and Partner Pay scheme with the 18 weeks of Paid Parental Leave (PPL) to create an enhanced 20-week scheme,
Single parents will get an extra two weeks of government-funded paid parental leave, paid at the minimum wage.
The changes will also allow fathers to access parental leave at the same time as any employer-funded leave (the same way mothers currently can).
The government is increasing the flexibility and broadening eligibility of the scheme, now allowing households earning up to $350,000 a year to qualify and removing a bias built into the existing scheme which often sees women on higher incomes (who are the primary earners) miss out on support.
Temporary cuts to the fuel excise
For the next six months, the fuel excise will be halved from 44.2 to 22.1c per litre to help alleviate the high cost of petrol and diesel for businesses and families.
The fuel excise cut is temporary and will last only for six months.
The ACCC will monitor prices to ensure cuts are passed on at the bowser.
Lower fuel prices will also benefit small businesses and help fight inflation caused partly by transportation costs of goods and services
These are just some of the key takeaways from this year’s budget. To read the full budget summary and papers head to https://budget.gov.au
Sources for this Insight include The Conversation, ABC and the Liberal Party
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