Let's unpack the 2024 Australian Federal Budget for Small to Medium Businesses.
As business owners, it's crucial to keep a pulse on the latest developments in government policies that directly impact your financial well-being. The 2024 Australian Federal Budget brings noteworthy changes that can benefit your business. Let's dive into the key takeaways:
Small business $20,000 Instant Asset Write-Off Extension: The government has extended the $20,000 instant asset write-off until 30 June 2025. Small businesses with a turnover of under $10 million can immediately deduct eligible assets costing less than $20,000 if they are first used or installed by 30 June 2025. Assets exceeding the threshold can be added to the general small business pool and depreciated at 15% in the first year and 30% in subsequent years. It's important to note that Parliament is still considering the legislation for this measure, so keep an eye on the instant write-off limits applicable when acquiring assets.
Small Business Energy Rebate: The government has expanded the Energy Bill Relief Fund to alleviate pressures related to the cost of living and support small businesses' cash flow. This expansion provides $3.5 billion in energy bill relief for all Australian households and eligible small businesses. Starting 1 July 2024, around 1 million small businesses will receive a $325 electricity bill rebate, while approximately 10 million households will receive a $300 bill rebate. This initiative aims to reduce the financial burden on small businesses and households during these challenging times.
Reversal of Proposed Changes to the ABN System: Previously, there were plans to introduce additional annual lodgement obligations for ABN holders. However, the government has decided not to proceed with these measures. Instead, they are focusing on enhancing administrative processes implemented by the Australian Taxation Office (ATO) to address integrity issues in the ABN system. This decision relieves compliance burdens for small businesses, as ABN holders will no longer be required to meet additional lodgement obligations.
Update on Debt Collection: Recognising the need for a more practical approach to managing tax debts, the government plans to amend the law to grant the Commissioner of Taxation greater discretion when offsetting tax debts with taxpayer refunds. This aligns with the ATO's existing administrative practices of "putting on hold" uneconomical debts and refraining from offsetting refunds in certain situations. If a tax debt was placed on hold before 1 January 2017, the Commissioner can choose not to offset the taxpayer's refund against that specific debt. However, further details about the ATO's discretionary powers and the turnover threshold for eligible small businesses are yet to be announced.
Small Business Helpline and Support: Running a small business comes with its own set of challenges, both financial and mental. The government has allocated $10.8 million over two years to extend the Small Business Debt Helpline and the NewAccess for Small Business Owners program. These resources offer financial counselling and mental health support explicitly tailored to the needs of small business owners. This initiative aims to provide valuable guidance and resources to help alleviate the unique pressures small business operators face.
By staying informed and taking advantage of the available resources, you can maximise these opportunities for your business's financial well-being. Remember, the financial landscape constantly evolves, so staying updated is crucial.
Visit https://budget.gov.au/ for the full unpack of the 2024 federal budget, or download the full report.
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