A Breakdown of the 2024-25 Federal Budget
The recently unveiled 2024-25 federal budget introduces several measures aimed at supporting small and family enterprises across Australia.
Overview of small business measures:
- Instant Asset Write-Off Extension:
The Australian Government will extend the $20,000 instant asset write-off by 12 months until 30 June 2025. 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.
- Enhanced Mental Health Support:
The government will allocate $10.8 million over two years to extend the Small Business Debt Helpline ($3.1 million) and the NewAccess for Small Business Owners program ($7.7 million) to continue to provide financial counselling and mental health support for small-business owners.
- Apprenticeship Program Boost:
The government will reverse a scheduled decrease in funding for apprenticeships in priority occupations and will increase payments for apprentices from $3,000 to $5,000 and hiring incentives for priority-occupation employers from $4,000 to $5,000, for 12 months from 1 July 2024.
- Workplace Compliance Support:
The government will restore funding to the Fair Work Ombudsman to help small business employers comply with changes to workplace laws – $20.5 million over four years and $5.1 million ongoing. $10.0 million over two years from 2024-25 will be provided to the Department of Social Services to support small-business employers in administering paid parental leave.
- Dispute Resolution Resources:
The government will restore funding to the Fair Work Ombudsman to help small business employers comply with changes to workplace laws – $20.5 million over four years and $5.1 million ongoing. $10.0 million over two years from 2024-25 will be provided to the Department of Social Services to support small-business employers in administering paid parental leave.
- Investment in Industry Code Reforms and E-Invoicing Infrastructure:
The government will provide $67.5 million over four years from 2024-25 (and $8.6 million per year ongoing) to continue to combat scams and online fraud through the introduction of mandatory industry codes to be established under a Scams Code Framework and increased use of the secure eInvoicing network. The government will also allocate $2.9 million in 2024-25 to review:
-
- the adequacy and effectiveness of dispute resolution tools available to ASBFEO’s assistance service
- the Food and Grocery Code of Conduct
- the Tax and Corporate Whistleblower Protection Framework
In addition, the government will spend $23.3 million over four years from 2024-25 for the Australian Taxation Office to continue to oversee and operate the secure eInvoicing network.
- Tariff Abolition and Tax Amendments:
From 1 July 2024, the government will permanently abolish 457 nuisance tariffs on a wide range of imported goods including toothbrushes, hand tools, fridges, dishwashers, clothing, and menstrual and sanitary products.
- Commissioner of Taxation Legal Amendment:
The government will amend the tax law to give the Commissioner of Taxation (Commissioner) a discretion to not use a taxpayer’s refund to offset old tax debts, where the Commissioner had put that old tax debt on hold prior to 1 January 2017. This discretion will apply to individuals, small businesses, and not-for-profits, and will maintain the Commissioner’s current administrative approach.
- Energy Bill Relief Fund:
The government will maintain provide $3.5 billion over three years from 2023-24 to extend and expand the Energy Bill Relief Fund to provide a $300 rebate to all Australian households and a $325 rebate to eligible small businesses on 2024-25 bills.
Reflecting on the Budget:
Bruce Billson, the Australian Small Business and Family Enterprise Ombudsman, captures the sentiment surrounding the 2024-25 federal budget noting, “While income tax cuts will drive demand, the budget forecasts that overall economic growth will be weaker, which will concern small and family businesses who have been doing it tough.”
Indeed, small and family businesses are navigating through a challenging landscape marked by sluggish growth, persistent productivity challenges, tight labour markets, and supply chain disruptions exacerbated by inflation and successive interest rate rises. These factors are taking their toll, highlighting the need to shift our mindset from merely weathering headwinds to harnessing the full potential of our hard-working enterprises.
Billson emphasises the stark reality: “Some 43 per cent of small businesses were not profitable in the last full tax year. Three-quarters of self-employed people, for whom their business is their full-time livelihood, take home less than average total weekly earnings.”
In recognising small businesses as the engine room of the economy, Billson urges policymakers and stakeholders to ensure these vital entities can operate at their full potential. “We need to get the risk and reward balance right, ensuring small business and entrepreneurship is a really attractive option for people, then create a supportive ecosystem to give enterprising people the best chance to be successful.”
For further details, you can access the government’s small business statement at budget.gov.au
Additional Resources:
