Blog

An Analysis of the 2022-23 Budget for SMEs

by | Apr 11, 2022 | 0 comments

As the world shifts towards all things digital, it has become increasingly important for small and medium enterprises (SMEs) to adopt digital technologies. Technology adoption can drive efficiencies to your business operations, which will allow you to provide better value to customers. Besides, the diffusion of new technological innovations and tools in the SME sector can significantly aid economic development and growth.

Many businesses in Australia have already transitioned to this digital space by adopting accounting automation, digital marketing, CRM, and other such tools. These technological tools have fundamentally changed the way these businesses operate.

Incentivising digital transformation further, the Australian Government released the Federal Budget 2022-23 on 29 March 2022. The budget consisted of special provisions for SMEs, including increased tax breaks for those businesses that invest in new technologies and skills. Let’s take a look at these provisions in greater detail.

Related blog post: Top 5 B2B Payment Hacks for Digitising Your Business

Federal Budget 2022-23: Tax Incentives for Small Businesses

In releasing the Federal Budget 2022-23, treasurer Josh Frydenberg announced that this year’s budget would contain special tax provisions for small and medium enterprises (SMEs). The Australian Government believes that small businesses are the driving force of the economy, and it wants to help the businesses in what they do best, which is:

  • Running their business
  • Growing their business
  • Creating more jobs for Australians.

SMEs that invest in skills training and digital adoption will be able to benefit from tax relief. This tax relief would allow small businesses to invest in better tools or hire an extra skilled worker.

The Government hopes that the tax breaks will provide Australian businesses with the necessary incentive to adopt digital technologies like B2B digital payments and automation systems, among other advanced tools.

What is Technology Investment Boost?

The Australian Government has allocated $1 billion for Technology Investment Boost, providing small businesses with the necessary encouragement to go digital. SMEs will have the provision to claim 120% of their annual expenditure on technologies and digital systems like cyber-security software, digital payment systems, B2B automation tools, etc. However, there will be a $100,000 annual cap on this expenditure, and only businesses with an annual turnover of $50 million or less will be eligible for it.

Over 3.6 million businesses will be eligible for the Technology Investment Boost. The scheme has come into effect immediately and will continue until 30 June 2023. Any expenditure incurred by qualified businesses before 30 June 2022 can be claimed in the coming tax years.

 

Download the CFO's Guide to AR Automation

Plus, get access to our toolkit of free eBooks, guides, templates and other resources.

Download the AR Toolkit

What are the other incentives for SMEs?

Skills and Training Boost: As per this scheme, SMEs will be able to claim 120% of their annual expenditure incurred in providing external training to employees. The total tax relief for this scheme will be around $550 million, and businesses with an annual turnover of up to $50 million will be eligible for it. SMEs also need to ensure that the training takes place in Australia by organizations registered in the country to be able to claim the tax relief. The Skills and Training Boost has come into effect immediately and will continue until 30 June 2024.

PAYG uplift rate: The Government is also planning to change the GST instalments and Pay-As-You-Go (PAYG) rate by only 2%, instead of 10%. Through this move, the Government aims to provide cash-flow support of an estimated $1.85 billion to small traders, SMEs, and other businesses using instalment methods. However, the legislation still needs to be passed in Parliament for the changes to take effect.

Economic Support for COVID-19: The Government has also allocated an extra $53.9 million for Business Support Payments.

How will these tax incentives benefit your business?

It is a well-established fact that small businesses are the lifeline of the Australian economy. However, many have struggled to stay afloat with the changing technologies. With the tax incentives provided in this financial year’s budget, your small business will be able to get the support it needs to build a sustainable and resilient infrastructure. Leading economists believe that the initiatives to support SMEs in the new budget are more targeted to their growth. It will allow you to improve your digital capabilities by using new technological innovations like accounts receivable automation tools, cloud subscription services, and more.

It is amply evident that this is the time for the growth of small businesses, and digital transformation makes that possible and lucrative too.

For more information on the 2022-23 Budget, visit budget.gov.au

Ready to start your business’s digital transformation?

Let digital technology change the way you do business for the better. Book a free demo of ezyCollect and discover how AR automation and B2B digital payments can work for you.

Latest Posts

Top 10 CFO’s resolutions for the new year

Top 10 CFO’s resolutions for the new year

Predictions point to another challenging year this 2023, and more than ever, the CFO will play a critical role in helping their organisations weather the storms and maximise profitability. Here are the top 10 resolutions for CFOs in the new year.
How to manage working capital and improve cashflow in your business

How to manage working capital and improve cashflow in your business

Understanding how cash flows in and out of your business is crucial in running and growing your business. On episode 2 of our 3-part B2B Financial MasterClass series, Lali Wiratunga, National Manager at Westpac’s Davidson Institute, shared with us the fundamentals of understanding cashflow, where cash hides in your business and tips on how you can improve cashflow in your business.
Five ways to reduce late B2B payments

Five ways to reduce late B2B payments

Collecting payments on time is as important as making the deal. Inadequate cash flow not only slows down your business’s day-to-day operations but also impacts your business’s overall progress. Here are some best practices and solutions that can help you reduce late payments in your business.

0 Comments

Submit a Comment

Your email address will not be published. Required fields are marked *

Access the FREE toolkit

Dig into our debtor management resources and build your own toolkit.  Get our most popular ebooks, templates and tips:

  • Telephone collection call scripts
  • Invoice templates for MYOB and Xero
  • Top performing reminder templates for email and SMS

...and so much more...for FREE!