2023-2024 Federal Budget - Small Business

Small Business

Energy Price Relief Plan

The Government will provide $1.5 billion over 5 years from 2022-23 (and $2.7 million per year ongoing) to reduce the impact of rising energy prices on Australian households and businesses by providing targeted energy bill relief and progressing gas market reforms. Funding includes:

• $1.5 billion over two years from 2023-24 to establish the Energy Bill Relief Fund to support targeted energy bill relief to eligible households and small business customers, which includes pensioners, Commonwealth Seniors Health Card holders, Family Tax Benefit A and B recipients and small business customers of electricity retailers
• $14.7 million over 5 years from 2022-23 (and $2.7 million per year ongoing) to the Australian Competition and Consumer Commission to administer and enforce compliance with a temporary cap of $12 per gigajoule on the price of gas and to develop and implement a mandatory gas code of conduct
• $9.5 million over 3 years from 2022-23 for the Australian Energy Regulator to monitor coal and gas markets across the National Electricity Market.

The Government will also provide funding to support the New South Wales and Queensland governments to implement a cap of $125 per tonne on the price of coal used for electricity generation. This funding is not for publication (nfp) due to commercial sensitivities.

Budget Speech p 4
Budget Overview p 12
Budget Paper No 2 p 86
Cost-of-Living Relief Fact Sheet
Media Release

Enhanced support for small and medium-sized businesses and startups

The Government will provide $431.9 million over 4 years from 2023-24 (and $79.2 million per year ongoing) to improve support for small to medium enterprises (SMEs) and startups. Funding includes:

• $392.4 million over 4 years from 2023-24 (and $68.2 million per year ongoing) to establish the Industry Growth Program to support Australian SMEs and startups to commercialise their ideas and grow their operations. Support will be targeted towards businesses operating in the priority areas of the National Reconstruction Fund
• $39.6 million over 4 years from 2023-24 (and $11.0 million per year ongoing) to continue the Single Business Service, supporting SMEs' engagement with all levels of government.

Budget Speech p 10
Budget Paper No 2 p 163
Budget Overview p 36
Regional Ministerial Budget Statement p 58
Media Release

Employment and Workplace Relations - reprioritisation

The Government will achieve savings of $212.9 million over 5 years from 2022-23 (and $41.4 million per year ongoing) across the Employment and Workplace Relations portfolio which will be redirected to fund other portfolio policy priorities. Savings include:

• $111.6 million over 4 years from 2023-24 by reducing place allocations for the Self-Employment Assistance Small Business Coaching program to more accurately reflect the utilisation of places
• $27.5 million over 4 years from 2023-24 by temporarily reducing uncommitted Industry Workforce Training program funding
• $22.8 million over 4 years from 2023-24 by ceasing the Entrepreneurship Facilitators Program from 1 July 2023
• $20.0 million over 4 years from 2023-24 by temporarily reducing uncommitted funding to support Job and Skills Councils
• $15.8 million over 4 years from 2023-24 by reducing the departmental operating funding of the Office of the Fair Work Ombudsman by 2.5 per cent
• $10.4 million over two years from 2022-23 by not proceeding with the Accelerating Australian Apprenticeships Pilot program
• $3.9 million over two years from 2022-23 by rescoping the Skills Assessments Pilots to align with current demand trends
• $1.1 million in 2023-24 by ceasing the Career Revive program on 30 June 2023.

Budget Paper No 2 p 106

Driving collaboration with small business to reduce the time spent complying with tax obligations

The Government will provide $21.8 million over 4 years from 2023-24 (and $1.4 million per year ongoing) to the Australian Taxation Office (ATO) to lower the tax-related administrative burden for small businesses. Funding includes:

• $12.8 million over 3 years from 2023-24 to trial an expansion of the ATO independent review process to small businesses (with aggregated turnover between $10 million and $50 million) subject to an ATO audit. The trial will commence on 1 July 2024 and run for 18 months
• $9.0 million over 4 years from 2023-24 (and $1.4 million per year ongoing) for 5 new tax clinics from 1 January 2025 to improve access to tax advice and assistance for 2.3 million small businesses. Eligibility for funding will be extended to TAFE institutions to improve access to tax clinic services in regional areas.

Budget Paper No 2 p 210
Budget Overview p 39
Media Release

Small Business Support $20,000 instant asset write-off

The Government will improve cash flow and reduce compliance costs for small businesses by temporarily increasing the instant asset write-off threshold to $20,000, from 1 July 2023 until 30 June 2024. Small businesses, with aggregated annual turnover of less than $10 million, will be able to immediately deduct the full cost of eligible assets costing less than $20,000 that are first used or installed ready for use between 1 July 2023 and 30 June 2024. The $20,000 threshold will apply on a per asset basis, so small businesses can instantly write off multiple assets. Assets valued at $20,000 or more (which cannot be immediately deducted) can continue to be placed into the small business simplified depreciation pool and depreciated at 15 per cent in the first income year and 30 per cent each income year thereafter.

Budget Speech p 10
Budget Paper No 2 p 27
Budget Overview p 38
Media Release

Small business support - helping small business manage their tax instalments and improving cashflow

The Government will amend the tax law to set the GDP adjustment factor for pay as you go (PAYG) and GST instalments at 6 per cent for the 2023-24 income year, a reduction from 12 per cent under the statutory formula. The reduced factor will provide cash flow support to small businesses and other PAYG instalment taxpayers. The 6 per cent GDP adjustment rate will apply to small businesses and individuals who are eligible to use the relevant instalment methods (up to $10 million aggregated annual turnover for GST instalments and $50 million annual aggregate turnover for PAYG instalments), in respect of instalments that relate to the 2023-24 income year and fall due after the enabling legislation receives Royal Assent. This measure is estimated to have no net impact on receipts, and no net impact on GST payments to the states and territories, over the 5 years from 2022-23.

Budget Paper No 2 p 27
Budget Overview p 39
Regional Ministerial Budget Statement p 86
Media Release

Small business support - Small business energy incentive

The Government will support small and medium businesses to save on energy bills through incentivising the electrification of assets and improvements to energy efficiency. Small and medium businesses, with aggregated annual turnover of less than $50 million, will be able to deduct an additional 20 per cent of the cost of eligible depreciating assets that support electrification and more efficient use of energy. Up to $100,000 of total expenditure will be eligible for the Small Business Energy Incentive, with the maximum bonus deduction being $20,000. A range of depreciating assets, as well as upgrades to existing assets, will be eligible for the Small Business Energy Incentive. These will include assets that upgrade to more efficient electrical goods such as energy-efficient fridges, assets that support electrification such as heat pumps and electric heating or cooling systems, and demand management assets such as batteries or thermal energy storage. Full details of eligibility criteria will be finalised in consultation with stakeholders.

Budget Speech p 10
Budget Paper No 2 p 28
Budget Overview p 38
Clean Energy Fact Sheet
Media Release

Tax Integrity - improving engagement with taxpayers to ensure timely payment of tax and superannuation liabilities

The Government will provide funding over 4 years from 1 July 2023 to enable the ATO to engage more effectively with businesses to address the growth of tax and superannuation liabilities.

Budget Speech p 14
Budget Paper No 2 p 29