The Australian Government’s Budget 2022–2023 was handed down on 29 March 2022. Following two years of the pandemic, the budget is planning towards a stronger future for Australia.
In the budget the Government highlights that it will deliver its plan for a stronger future through: “Supporting small businesses to adopt digital technology and train and upskill employees with new tax incentives.”
As well as impacting small to medium businesses, parts of the budget address general cost of living pressures and taxpayer obligations. Some measures will assist the charity and NFP sector and rebuilding communities.
Next Dimension will be working with clients on the detail of changes as more information becomes available. Following are some of the key features of the budget for SMEs and NFPs.
Small Business
Government procurement to facilitate SME contractor opportunities
Proposed changes would require Government departments to split up major projects so that smaller contractors have a better chance at competing for contracts. In addition, the Department of Defence will be undertaking limited tenders with SMEs for procurements up to $500,000 from 1 July 2022
Tax breaks for small businesses that train their staff
Those SMEs with an aggregated annual turnover of less than $50 million that continue to train their workers in new skills will get a break. They will be able to deduct an extra 20 per cent of expenditure on external training courses. The effect will be a $120 tax break for every $100 spent on training. Conditions include that the training must be delivered by training entities registered in Australia.
Technology boost for small business investing in digital tools
The SMEs with an aggregated annual turnover of less than $50 million can get a 20 per cent additional tax deduction on business expenses and depreciating assets that support their adoption of digital workplace items such as portable payment devices, cyber security systems, or cloud subscriptions. The deductions will be capped at $100,000 of expenditure per year.
GDP uplift rate set at two per cent
The GDP uplift factor for PAYG and GST instalments will be set at two per cent for the 2022–23 tax year, subject to the legislation passing. This will result in lower instalments for 2.3 million small to medium businesses and sole traders. It compares favourably to the 10 per cent that would have applied under statutory formula.
Support for wellbeing of small business owners
The Beyond Blue program to provide free, accessible and tailored mental health support to small business owners will continue, with funding for the New Access for Small Business Owners of $4.6 million over two years. The Financial Counselling Australia program to provide financial counselling to small businesses facing financial issues will also continue with funding for the Small Business Debt Helpline funded by $2.1 million over two years.
Fair Work funding
There will be funding of $5.6 million over four years for the Fair Work Commission to establish a dedicated unit to support small businesses, including unfair dismissals and general protections disputes.
Small business financial capability
There will be funding of $8.0 million for the Australian Small Business and Family Enterprise Ombudsman to work with service providers to enhance small business financial capability.
Other measures impacting taxpayers
Taxpayer compliance streamlined with automated reporting
The Government will leverage new technology and update systems to automate tax reporting requirements. This will allow companies to calculate their Pay-As-You-Go (PAYG) instalments based on current financial performance, extracted from business accounting software, with some tax adjustments. This means companies may be able to receive an automatic refund of PAYG instalments where financial performance declines.
There is also a proposal for:
- Single Touch Payroll (STP) data to be shared with State and Territory Governments on an ongoing basis to enable the pre-filling of payroll tax returns.
- Businesses required to lodge with the Australian Taxation Office (ATO) a taxable payments annual report (TPAR) to be able to opt into automatic reporting supported by new software.
NFPs
The government announced a $2.1 billion Budget package of targeted measures “to further support Australian women and girls as part of our plan for a stronger future”. $1.3 billion is allocated to improve outcomes for women’s safety which includes investing in community-led prevention programs.
The government also announced $26.9 million investment into allergy prevention and management, which will lead to the creation of two organisations, the National Allergy Council and National Allergy Centre of Excellence (NACE). These organisations will work together to deliver world-leading initiatives and research to improve consumer safety and prevent anaphylaxis deaths.
Flood-affected NFPs, along with primary producers, small businesses and councils, will be covered in an estimated $2.0 billion in support measures for the February/March 2022 floods in New South Wales and Queensland.
With the substantial additional investment provided in last year’s Budget to meet the increasing costs of the National Disability Insurance Scheme (NDIS), there are limited measures within this Budget specific to Australians with a disability. Additional funding is likely to follow completion of the Disability Royal Commission in 2023.
Integration across the aged, disability and veterans’ care sectors
There is a strong focus on integrating the aged care, disability and veterans’ care sectors, with a total of $17.7 million allocated to streamline workforce regulation and promote efficiencies across the three sectors, including:
- $10.8 million to develop a Cross-Agency Taskforce on Regulatory Alignment to implement the next stage of regulatory reforms across the aged, disability and veterans’ care sectors.
- $6.9 million to support the development of co-operatives and other collaborative business models across the aged, disability and veterans’ care sectors.
Conclusion
The Government describes the budget as a plan that “Delivers more jobs as we push the unemployment rate below 4 per cent, supports small business, expands and modernises Australia’s sovereign manufacturing capability, secures our supply chains and invests more in infrastructure, skills and the digital economy.”
