Small Business – Small Gains
This Budget will assist small businesses, but predominantly those that are in the growth phase, leaving behind those small businesses that are in the start-up phase or in survival mode.
In this Budget, small businesses (as defined) can look forward to:
- Immediately deducting the full cost of eligible assets costing less than $20,000 that are first used or installed ready for use between 1 July 2023 and 30 June 2024. While this benefits those small businesses (with turnover less than $10 million) making profits as they are able to reduce their taxable income against asset expenditures, increased tax deductions will be of no value to those businesses making losses.
- Deducting an additional 20% of the cost of eligible depreciating assets that support electrification and more efficient use of energy, providing such assets are first used or installed ready for use between 1 July 2023 and 30 June 2024. Up to $100,000 of total expenditure will be eligible for the Small Business Energy Incentive, with the maximum bonus deduction being $20,000. Full details of eligibility criteria will be finalised via consultations with stakeholders. Again, this measure will assist small businesses (with turnover of less than $50 million) that are able to make such expenditures depending on the profitability of their business.
- The Government will amend the Gross Domestic Product (GDP) adjustment factor for PAYG and GST instalments at 6% for the 2023/24 income year, instead of 12%. The reduced factor will provide cash flow support to small businesses and individuals who are eligible to use the relevant instalment methods.
Clearly, any measures that go towards improving the small business tax landscape are welcomed. However, to the extent that you are in a small business that is still struggling and fighting to stay alive, with your personal assets subject to bank guarantees, this Budget will provide little joy.