Treasurer Jim Chalmers announced the first surplus in 15 years on May 9, in a budget he said aimed to “strike a considered, methodical balance… between spending restraint to keep the pressure off inflation, while doing what we can to help people struggling to make ends meet”.
So, what measures does Federal Budget 2023 include that impact Australian businesses?
The budget, tax & accounting
by Damian James
$20,000 small business instant asset write off
- Small businesses, with an aggregated turnover of less than $10 million,
can immediately deduct the full cost of eligible depreciating assets valued at less
than $20,000 ( first used or installed ready for use July 1 2023 – June 30 2024). - Tax deduction for the asset can be claimed in the same income year that the
asset was purchased and used (or installed ready for use). - If the business is registered for GST, the cost of the asset must be less than $20,000 after subtracting GST credits.
- If the business is not registered for GST, the $20,000 including GST.
- This write-off applies per asset, so a small business can deduct the cost of multiple assets.
$20,000 small business incentives for energy efficiency
- Available to small and medium businesses (SMEs) with aggregated annual turnover of less than $50 million.
- The Small Business Energy Incentive provides an additional deduction of 20% of the cost of eligible depreciating assets that support electrification/more efficient use of energy.
- Up to $100,000 of total expenditure will be eligible, with a maximum bonus deduction of $20,000.
- Full details to be confirmed but expected to apply to a range of depreciating assets and upgrades that support energy efficiency in heating, cooling, refrigeration, cooking, batteries and heat pumps.
Payday super
- It is proposed that the frequency of employer super payments to employees will change.
- Employees will be paid their super entitlements on the same day they receive their salary or wages.
- Payday super will commence on July 1, 2026, with further consultation to determine the details of the final design of the measure.
If you would like to learn more about the tax and accounting implications of Federal Budget 2023 on your business please contact Damian James and our accounting team on (03) 9325 6300.
The budget and government grants
R&D Tax Incentive
- R&D program remains unchanged as the primary support for innovation.
- This provides welcome stability to a vital innovation stimulus program.
Export Market Development Program (EMDG)
- From FY26 the EMDG will be reduced from $158M to $110M per year.
- EMDG applications already in the system for FY24 and FY25 will be unaffected.
Industry Growth Program (IGP)
- The IGP replaces the Entrepreneur’s Program and targets startups and SMEs seeking to commercialise new ideas that align with the priority areas of the National Reconstruction Fund.
- The IGP will provide advice and a pipeline of quality, investment-ready projects for the National Reconstruction Fund (NRF) to consider
- Matched grant funding from $50,000 to $5 million.
- Focus areas for the IGP include:
- Renewables and low emissions technologies
- Medical science
- Transport
- Value-add in the agriculture, forestry and fisheries sectors
- Value-add in resources
- Defence capability
- Enabling capabilities
- Details of how the IGP will operate are yet to be confirmed.
National Reconstruction Fund
- The administrative operation of the $15B NRF has been funded in the budget.
- Actual implementation and operation of the NRF is still to be finalised.
Critical technology industry support
$101.2M over five years from 2022–23 to support businesses to integrate quantum and artificial intelligence (AI) technologies into their operations, through:
- The Critical Technologies Challenge Program initially focused on quantum computing.
- Extending the National AI Centre and its role in supporting responsible AI usage.
- Establishment of an Australian Centre for Quantum Growth.
- Support for small and medium enterprises’ adoption of AI technologies.
If you would like to learn more about how Federal Budget 2023’s grants and funding measures can support your business please contact Richard Wraith and our government grants team on (03) 9325 6300.