How the 2022–2023 Federal Budget Impacts Your Business

30 March, 2022

8 mins read

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On Tuesday, 29 March 2022, the Australian Federal Government delivered the 2022–23 Federal Budget. This year’s budget was designed to tackle the rising cost-of-living, much-needed infrastructure upgrades and continuing business recovery.

To save you time, we’ve outlined the 5 ways this year’s Federal Budget is going to impact Australian businesses. Naturally, this information is for general use and should not replace professional opinions. We recommend speaking to your local business finance specialist before taking any action.

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5 Ways the 2022–2023 Federal Budget Impacts Your Business

1. 120% tax deduction for small-to-medium businesses.

The Federal Government has announced small-to-medium enterprises (SMEs) will be eligible for temporary tax deduction of up to 120% for investments up to $100,000 — but there is a catch.

Only businesses investing in new technology and skills (including employee training and web design) will be eligible for the tax break.

This additional tax deduction will be available to SMEs from 7:30pm AEDT, 29 March until 30 June 2023 for technology investments and 30 June 2024 for staff training.

What this means for you:

So, what does the 120% tax deduction mean for business owners? This additional deduction means if a business was to invest $5,000 for a new website, they could be eligible for a $6,000 deduction.

2. Support for apprenticeships. 

A further $2.8 billion will be invested in apprenticeships, as announced in the 2022–2023 Federal Budget. There is hope the additional funding will increase the up-take on apprenticeships and completion rates.

New apprentices will be able to access a payment of up to $5,000, paid in bi-yearly instalments over 2 years, and employers will be eligible for up to $15,000 in wage subsidies.

These changes will come into effect from 1 July 2022 for apprentices in priority fields.

What the apprenticeship funding means for your business:

If you’re an employee who undertakes a new apprenticeship from 1 July 2022 you may be eligible to access a 10% wage subsidy in the first year, which will drop to 5% in the third year.

3. Cost-of-living relief. 

From 1 July, more than 10 million Australians will be eligible to receive a $420 cost-of-living tax offset on-top of the pre-existing low-and middle-income earner $1,500 offset. It is hoped this additional offset will help Australians adjust to the rising costs of living.

What cost-of-living relief means for Australian businesses:

The rising cost-of-living can often mean consumers tighten their purse strings and save more for a rainy day. While the one-off payment and tax offset are not stimulus, they will provide relief to consumers, allowing for more non-essential purchases, supporting local businesses. The full offset will be given to those who earn between $48,000 and $126,000.

4. Temporary fuel excise relief. 

Recent world events have contributed to a hike in fuel prices across the country, adding to the pressure many small businesses are already experiencing due to the rising cost-of-living.

In an attempt to combat this, the Federal Government will reduce the fuel excise by 50% for 6 months. This equates to a roughly 20c saving per litre of fuel.

What temporary fuel excise relief means for businesses:

The transport and logistics sector in Australia has estimated annual revenue of $101.51 billion. For this industry and many other, the rising fuel costs are putting financial strain on what is already a tough time for many.

The fuel excise relief aims to help provide short-term relief for these businesses who rely on transportation for their day-to-day operations.

5. Continued support for child care.

Child care is a massive expense for many Australian families. So much so, some families opt for one parent to stay home to care for their family as it is more financially viable than child care alternatives.

In March, the Federal Government introduced additional Child Care subsidies to aid families with the financial burden of child care. This year’s budget will continue to support this initiative.

What the support for child care costs means for your business:

For many business owners and their employees, it can be hard to juggle finding child care alternatives and their work responsibilities.

With further funding towards child care, it can give business owners and their employees with children more confidence in a regular schedule.

Disclaimer: This article is for general informational purposes only and does not replace professional advice or counsel. Neither Localsearch nor the author are liable for any misuse of information. Please speak to your business financial advisor for information specific to you.

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