Most importantly, the 2022-23 Budget extends cost-of-living relief and lays out a pathway for the Government of Australia to invest in the future of the country’s businesses. It becomes a crucial step during challenging times when inflationary and economic pressures and the resultant global uncertainty are on the rise.
What are the key policies affecting SMEs in the 2022-2023 Federal Budget?
1. Workplace relations support
An essential policy inclusion supporting SMEs in the country concerns the employer-employee relationship that pervades these organisations. The Government intends to work with small-and-medium businesses, trade unions, and industry works to create a simpler, fairer, and more accessible workplace relations system. With such a system in place, small businesses can now inclusively agree with their workforce and enjoy bargaining support.
A sum of AUD 7.9 million from the Australian federal budget for small businesses is allotted over four years to the Fair Work Commission, a tribunal dedicated to Australia’s workplaces. Such a measure is intended to support enterprise bargaining of small businesses. To enable employers and employees to reach agreements on disputes, the Government plans to extend additional support to facilitate arbitration for inflexible disputes.
2. Mental well-being support
While it’s truly a rewarding and prideful experience to own a small enterprise, the stress caused by long work hours can reduce efficiency and lead to burnout and depression.
It’s time for small business owners in the country to know that they are not alone. The Australian federal budget for small businesses has great mental health support plans. The Government allotted $15.1 million, starting from 1 January 2023 until 31 December 2024, towards two programs: the NewAccess for Small Business Owners and the Small Business Debt Helpline. Both programs are free of cost and focused on uplifting business owners’ mental and financial well-being.
The NewAccess for Small Business Owners is a mental health program offered through one-on-one, confidential coaching with the mental health organisation Beyond Blue. On the other hand, the Small Business Debt Helpline gets a significant share of the budget since it’s a valuable financial counselling program offered by the syndicate body of financial counsellors, Financial Counselling Australia.
3. Paid family and domestic leave small business support
The latest Australian federal budget for small businesses has provisions for support for people in the workforce who require financial aid due to their familial conditions. The Government has set forth legislation under which people get ten days of paid leave for domestic and family violence by amending the Fair Work Act 2009.
Moreover, the Government is also offering $3.4 million from the 2022-2023 Budget for SMBs towards the Fair Work Ombudsman, which would extend support services and advice to these enterprises on the newly-introduced entitlements of workers.
The budget allocation takes place over 4 years to aid the development and provision of education, support services and technical advice addressing the needs of SMBs while implementing the paid leave entitlements.
4. Skills focus – free TAFE courses to support skills shortage for businesses
Australia’s SMBs have immense growth potential that they have not been able to tap much because of a talent shortage. To ease the issue, the Government has included over $1.4 billion in the Australian federal budget to improve the TAFE courses and expand visa-processing capacities. It has also included an Australian Skills Guarantee scheme to promote apprenticeship and has devised measures to encourage pensioners in the country to work in an alternative occupation.
The Government intends to introduce 480,000 TAFE courses for free and community-based vocational education over the next four years. It has forged an agreement of $1 billion with the Australian states and territories to offer 180,000 places next year. The agreement aims to prioritise students’ training who traditionally face obstacles in their study and work. It also intends to create a TAFE Technology Fund worth $50 million to modernise TAFEs and deliver the latest IT facilities, laboratories and workshops to students. Also, a new five-year National Skills Agreement is set to start in 2024 to uphold the future of vocational courses.
5. Energy efficiency grants and tax cuts
Achieving 100 per cent energy efficiency is a dream that many countries wish to manifest in reality, but the picture is not as rosy as it appears. However, the Australian federal budget for small businesses is optimistic to address the issue.
Grants for SMS investment in energy-efficient assets
To curb the soaring energy costs in Australia, the federal government has committed $62.6 million to help SMBs boost their energy efficiency and lower their energy use. The government grants are expected to empower SMEs to invest in energy-efficient electricity grids that save costs by lowering utility bills. Moreover, the 2022-2023 federal budget seeks to increase energy efficiency by upgrading any obsolete equipment that consumes more energy and delivering long-term savings.
Tax cuts for vehicle owners
The latest budget includes Fringe Benefits Tax (FBT) exemption that’s applicable on hydrogen fuel battery cells and hybrid, plug-in EVs that were first held and/or used on/after 1 July 2022 and whose retail price is lower than the luxury car threshold of $84,916 for fuel-efficient cars as of 30 June 2023. Also, there will be a 5% reduction in import tariff imposed on the importation of electric vehicles from countries that do not have a free-trade agreement with Australia.
6. Fair playing field for SMEs with increased funding of ATO compliance programs
The Australian federal budget for small businesses also includes increased funding toward key programs aimed at non-compliance with personal income tax laws and those aimed at big businesses and the shadow economy. An additional $80.3 million in funding is set aside to modernise the Australian Taxation Office (ATO) compliance programs and engage with taxpayers and tax agents to monitor their compliance activities.
The Government has also allotted funds towards extending the current Shadow Economy Program for another 3 years until 30 June 2026, costing the Government a substantial sum of $685.2 million. This program is widely focused on targeting individuals and SMEs indulging in corrupt and dishonest activities.
Moreover, the Tax Avoidance Taskforce, extended till 30 June, has received additional funding to ensure that SMEs, multinational enterprises and individuals are paying the right amount of tax in the country.
7. Support for SMEs affected by flood and bushfires in NSW and Queensland
The Government has now taken measures to extend payments and relief to individuals and support the efforts of states to alleviate the hardship experienced by local communities and SMEs affected by extreme weather conditions.
The Labor Government has promised to deliver quicker help to affected areas and issued warnings of future contingencies due to climate change. It has reserved $3 billion to meet disaster recovery costs from flooding and bushfire events.
About $200m annually will be budgeted for the prevention and recovery initiatives and facilitate projects to build sea walls, flood levees, cyclone shelters, fire breaks and evacuation centres.
How do these measures benefit your business?
In conclusion, the Australian federal budget for 2022-2023 has considered the scope for small and medium businesses to flourish under changing environmental and economic conditions while giving them the means to ensure certainty and plan for the future.
For more information on the Australian federal budget, visit budget.gov.au
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