When Treasurer Jim Chalmers handed down the 2024-25 Federal Budget on 14 May 2024, it was clear that the government had a diverse range of objectives. From offering tax cuts to supporting vulnerable groups, the budget is packed with measures aimed at stimulating economic growth and providing relief. Let’s unpack the key points from this year’s budget, focusing on how they impact small businesses.

Tax Incentives and Extensions

Instant Asset Write-Off

One of the standout features for small businesses is the extension of the instant asset write-off. This allows businesses to immediately deduct the cost of eligible assets, rather than depreciating them over several years. This extension provides an excellent opportunity for small businesses to invest in new equipment and technology, boosting productivity and efficiency.

Tax Incentives for Critical Minerals and Hydrogen Production

The government is also offering tax incentives aimed at critical minerals and hydrogen production. While these sectors may seem distant from typical small business activities, any small business involved in supply chains linked to these industries can benefit indirectly. For instance, if you’re a supplier or contractor in related fields, these incentives could trickle down to you.

Cost-of-Living Relief and Energy Bill Assistance

Energy Bill Relief

Energy costs can be a significant burden for small businesses. The budget includes a $3.5 billion extension and expansion of the Energy Bill Relief Fund over the next three years. Eligible small businesses will receive a rebate of $325 on their electricity bill over the next financial year, in quarterly instalments. This measure aims to alleviate some of the financial pressures associated with rising energy costs.

Rent Assistance

The government is increasing the maximum rates of Commonwealth Rent Assistance by 10 per cent, with a $1.9 billion investment over five years. While this initiative primarily targets households, any small business will find the increased disposable income among customers can lead to more spending power, potentially boosting sales.

Superannuation Changes

Paid Parental Leave

Starting 1 July 2025, superannuation will be paid on Government-funded Paid Parental Leave. This change ensures that employees’ superannuation balances continue to grow even when they take parental leave, which is especially beneficial for female employees who are more likely to take extended leave. For small businesses, this can improve employee satisfaction and retention.

Compliance and Support

The government is allocating $60 million over four years to support practical activities for employer and worker representatives related to Payday Super. Additionally, $20.5 million over four years will be provided to help small business employers comply with recent changes to workplace laws. These measures aim to simplify compliance and ensure that small businesses can meet their obligations without undue stress.

Support for Small Business Employers

Workplace Relations

$111.8 million over four years (and $12.4 million per year ongoing) will be provided to progress the government’s workplace relations agenda. This funding will help streamline processes and reduce the administrative burden on small business owners.

Anti-Money Laundering and Counter-Terrorism Financing Act

$168 million over four years will be invested to strengthen Australia’s Anti-Money Laundering and Counter-Terrorism Financing Act 2006. If your small business deals with significant financial transactions or operates in a high-risk sector, staying compliant with these regulations will be crucial.

Investments in Infrastructure and Technology

Regional Community Infrastructure

The budget allocates $101 million to upgrade regional airports and connecting infrastructure. For small businesses in regional areas, improved infrastructure can mean better access to markets, resources, and customers. It’s a step towards levelling the playing field between metropolitan and regional businesses.

Clean Energy and Quantum Computing

The government is unlocking more than $65 billion of investment in renewable capacity and clean energy technologies. Small businesses in the renewable energy sector or those looking to transition to greener practices can benefit from these investments. Furthermore, the budget includes building the world’s first commercial-scale quantum computer, which can open new avenues for innovation and growth in tech-driven small businesses.

Health and Social Support

Medicare and Aged Care

$2.8 billion will be invested in strengthening Medicare, including addressing health system pressures and improving access to medicines and mental health support. Additionally, $2.2 billion is allocated for aged care reforms. These measures ensure that your employees have access to better healthcare, contributing to their overall well-being and productivity.

Support for Women and Vulnerable Groups

The budget outlines financial assistance for victim-survivors leaving violent partners, and $2.4 billion will be invested over five years in priority areas including jobs, health, education, justice, housing, and essential services. These initiatives aim to create a more inclusive and supportive environment, which can positively impact your workforce and community.

Practical Steps for Small Business Owners

Understanding the federal budget is one thing, but how can you practically apply this knowledge to your business? Here are some actionable steps:

1. Review Your Asset Purchases: With the extension of the instant asset write-off, consider what new equipment or technology your business needs. Investing now can lead to immediate tax benefits.
2. Monitor Energy Costs: Ensure you’re eligible for the energy bill rebate and adjust your budgets accordingly. Every bit of savings helps.
3. Stay Compliant: Keep up to date with changes in superannuation and workplace laws. Use the allocated support to ensure you’re meeting all legal requirements without unnecessary stress.
4. Explore Grants and Incentives: Look into government grants and incentives for clean energy projects. Small investments in sustainability can lead to long-term savings and customer goodwill.
5. Engage with Community Initiatives: Participate in regional infrastructure projects and community support programs. Building a strong local network can provide new opportunities and support.

Conclusion

The 2024-25 Federal Budget presents a wealth of opportunities and support mechanisms for small business owners. From tax incentives to cost-of-living relief and investments in infrastructure and technology, the measures outlined aim to foster a more resilient and dynamic business environment.

Remember, the key to leveraging these opportunities lies in understanding the specifics and taking timely action.

For more detailed advice tailored to your business, talk to us now.