Tax breaks, wage incentives for apprenticeships, and support for business digitisation are among the biggest features of the 2022 federal budget.
Following an extremely volatile and challenging couple of years, business confidence is strong in 2022. According to the Roy Morgan Business Confidence index, businesses are optimistic about current conditions, with the score jumping 19 points to 120.5 in February (above 100 is considered positive).
However, key pain-points for SMEs remain. As well as labour shortages impacting a wide range of industries, there’s been a huge increase in the cost of materials, along with supply issues in sourcing materials.
The government aims to address these issues with a boost to skills and training spending. Scott Morrison’s budget pledges $2.8 billion in funding for an overhauled apprenticeship incentive scheme, with a goal to to grow the number of qualified tradespeople through subsidiaries for employers. Up to $15,000 is on offer towards the wages of eligible apprentices and trainees in priority sectors, while the employee is personally eligible for a lump sum of up to $5,000.
In addition, small businesses with an aggregated turnover of up to $50 million will be able to deduct an additional 20% on top of expenditure for external training courses provided to their employees.
This means if an eligible course or program costs $1000, the business will be able to claim an amount of $1200. This measure aims to help small businesses embrace new technologies and training courses to upskill staff, at a cost to the government of $1.6bn in lost tax revenue.
The same rule applies if you choose to invest in technology for your small business on depreciating assets that support digital adoption. Capped at $100k in deductions for the financial year, a business could invest in things like:
- Subscriptions to cloud-based services
- Cyber security systems
- Portable payment devices
Support for business to thrive again
While businesses may be eligible to benefit from the extension to apprentice wage subsidies, most covid-related support relief packages have now ceased.
Any work-related COVID tests are tax deductible and exempt from FBT, and some industries hardest hit by the pandemic will benefit from targeted support, such as the $146.5 million announced to underpin the recovery of the Australian tourism sector.
A further $80 million has been pledged over four years from 2022-23 to help small and medium export businesses re-establish their presence in overseas markets through the Export Market Development Grants program.
There will be less red tape and reporting requirements and larger caps (up from $5k to $30k) for employee share schemes, and over $6 million will be spent over two years to support the New Access for Small Business Owners program delivered by Beyond Blue, and to extend the Small Business Debt Helpline program operated by Financial Counselling Australia.
Overall, small businesses were among the main beneficiaries in the 2022 federal budget, with SMEs serving the infrastructure sector to benefit from an additional $17.9 billion committed to infrastructure projects across the country.