What this year's federal budget means for small businesses


March 30 2022

Last week, Treasurer Josh Frydenberg gave hope to small businesses across Australia stating: "small and medium businesses are the backbone of our economy, employing millions of Australians".

But what did last night's budget deliver for small businesses? Here's a quick run-down of the key points:

  • $1.6 billion in tax relief support small businesses to go digital and upskill their employees in the form of the Technology Investment Boost. In effect this means that businesses with a turnover of under $50m that spend money on new technology and training, can claim a120% tax deduction. This will affect around 3.6 million businesses across the country.
  • Treasurer Josh Frydenberg said small businesses would be “rewarded” with a $120 tax deduction for every $100 spent on digital technologies such as cloud computing, einvoicing, cyber security and web design. — Great news for users of bzTrack who will receive $1.20 tax deduction for every $1 spent on each transaction.
  • $120 tax deduction for every $100 spent on training employees.
  • Mental Health was addressed this year with the Government including $4.6 million for Beyond Blue support for entrepreneurs.
  • A dedicated small business support unit with $5.6 million in funding, will be established as part of the Fair Work Commission providing millions in funding to the Australian Small Business and Family Enterprise Ombudsman (ASBFEO). This will deal with unfair dismissal cases and industrial protection disputes for small businesses. If the Morrison government remains, they plan to review the way redundancy payments are calculated under the National Employment Standards in the Fair Work Act in the hope that this will reflect better on the average working hours over a person's career.
  • Cash flow (a subject close to our hearts) was also addressed last night. The GDP uplift rate that applies to PAYG income tax and GST instalments will be reduced to 2% (compared to 10 per cent that would have applied under statutory formula) for the 2022–23 income year.

What does this mean? — Lower tax instalments, delivering $1.85 billion in cash flow support for 2.3 million small to medium businesses, sole traders and others who use the instalment amount method.

The Skills and Training Boost will also cover spending incurred by eligible businesses from Tuesday, and will last until 30 June 2024. The caveat is that in-house or on the job training isn't eligible and the courses can be provided in person (only in Australia) or online. The Technology Investment Boost is budgeted to cost $1bn in forgone tax revenue over the life of the scheme, while the Skills and Training Boost will similarly reduce tax revenue by $550m.

Read more on the ABC official page.