Key Initiatives of the 2024-25 Federal Budget Impacting Small Businesses

The economic landscape is creating challenges for most businesses. High interest rates are placing cashflow strains on businesses servicing debt, while supply chain disruptions are leading to lost sales or higher expenses. Labour and skills shortages are resulting in employers paying more to hold onto employees or incurring more costs to upskill them, which is impacting their bottom line.

The Federal Budget for 2024-25 has been delivered and while it does not have a whole lot of big ticket items for small business owners, it still includes some items impacting small business, including the instant asset write off, skills measures and energy rebates.

Instant Asset Write Off

For small businesses with a turnover of less than $10 million, the instant asset write-off threshold of $20,000 has been extended until 30 June 2025.

This extension enables small businesses, which purchase any depreciable asset priced below $20,000 (ex GST), to immediately deduct the expense from their income, rather than spreading the deduction out over multiple years.

Any assets exceeding this threshold can be included in the small business simplified depreciation pool. This arrangement enables you to claim 15% of the asset's cost in the first year and 30% each subsequent year.

Apprentice and Skills Measures

The Apprentice Incentive Scheme will have existing payments extended from 1 July 2024, with the amounts increasing to $5,000 for both Apprentices and Employers. Additionally, the federal government will offer up to $10,000 payments for motor, electrical and other apprentices willing to learn clean energy skills in their fields.

While this scheme already exists in certain priority occupations, the government will broaden the eligibility to include apprentices in the automotive, electrical, housing and construction sectors based on feedback from the industry.

20,000 new fee-free TAFE places in courses relevant to the Construction Industry have also been announced, which is expected to save expenditure for some employers who pay TAFE fees for their apprentices.

With the additional funds set aside in the budget for hiring and training apprentices in certain industries, it may be a good time for your business to seek out apprentices and trainee to grow your team.

Energy Bill Relief

Small businesses are set to receive a one off $325 rebate from 1 July 2024 towards energy bill relief. It is interesting to note that households are also expected to receive a $300 energy rebate.

ATO Funding for Compliance Program

The Government will provide an additional $27 million to the ATO to improve the data matching capabilities to ensure ATO debts and employee super obligations are being paid on time, and is in addition to the significant amounts announced in last year’s budget. This will be combined with the government setting targets for the ATO for recovering unpaid superannuation.
As always, it is important to ensure to take sufficient steps to mitigate your individual and business compliance risk, including keeping appropriate records, staying up to date with lodgements and taking care around complex or risky tax areas.

Payment Times Reporting

Announced a few years ago, the government will soon fund a Payment Times Reporting Regulator that is designed to name and shame slow paying big businesses. This is designed to ensure that small businesses are not waiting too long to be paid, which is especially important given how critical cashflow is for small business.

Individuals

As previously announced, the Government has legislated tax cuts for all 13.6 million Australian taxpayers starting from 1 July 2024. These cuts aim to alleviate the cost of living for Australians. However, it's worth noting that these tax cuts are significantly less than what was initially planned by the previous government. Despite this, they will still create an increase in the take-home pay of Australians.

If you would like to understand more about how any of these budgetary measures may impact you or your business, please contact LINK Advisors, and we can assist you.