The Budget puts forward a number of measures aimed at easing cost pressures, boosting productivity, and enhancing confidence in the small business sector. These initiatives primarily rest on an extension of the instant asset write-off on assets under $20,000 for businesses with an aggregate annual turnover of less than $10 million and a $325 energy bill rebate.
Instant asset write-off
- As part of the COVID-19 stimulus measures the then Government instituted a ‘temporary full expensing’ scheme. That scheme came to an end on 30 June 2023. In the 2023-24 Budget, the Government announced that the instant asset write-off scheme would return to apply to assets under $20,000, and to small businesses with an aggregate turnover of less than $10 million. The Labor Government has now extended the existing instant asset write-off by 12 months until 30 June 2025.
- The instant asset write-off in the 2024-25 Budget allows small businesses to immediately deduct the full cost of certain assets if:
- The business has an aggregate annual turnover of less than $10 million;
- The cost of the asset is less than $20,000; and
- The asset was first used or installed ready for use by 30 June 2025.
- As the instant asset write-off applies to each asset, small businesses can instantly write off multiple assets. Assets which cost more than $20,000 (and therefore fall outside the instant asset write-off) can be placed in the small business simplified depreciation pool. In this pool, assets can be depreciated at 15% in the first year, and 30% for each following year.
- The provisions that prevent small businesses from re-entering the simplified depreciation regime for five years if they opt-out will continue to be suspended until 30 June 2025.
Setting off of tax debts against refunds
The Government has announced the Commissioner of Taxation will be given the power to not use a refund owed to a taxpayer to offset a tax debt owed to the Commissioner which was put on hold prior to 1 January 2017. This discretion will apply to individuals, small businesses and not-for-profits, and will maintain the Commissioner’s current administrative approach.
Energy bill relief
Small businesses will be eligible for a $325 rebate on 2024-2025 energy bills. This measure sits alongside a $300 rebate provided to all households.
Other small business measures
The Government has provided funding for a number of other initiatives:
- Additional funding for the Payment Times Reporting Regulator: The Payment Times Reporting Regulator is receiving an additional $25.3 million over four years to support the implementation of reforms recommended by the statutory review of the Payment Times Reporting Act 2020, including increased resourcing for the Regulator and upgrading the Regulator’s technological infrastructure. The Payment Times Reporting Act 2020 requires certain entities, including large businesses, to report information on their payment terms and practices in relation to their small business suppliers.
- Additional funding for the eInvoicing network: The Government has announced $23.3 million in funding for the Australian Taxation Office to continuing operating the secure eInvoicing network, which is designed to disrupt payment redirection scams and boost productivity.
- Additional funding for small business helplines: The Government will provide $10.8 million over two years to extend the Small Business Debt Helpline and the NewAccess for Small Business Owners program, which provide financial counselling and mental health support for small business owners.
- Additional funding for Paid Parent Leave scheme administration: In addition to its expansion of the Paid Parent Leave scheme, the Government has announced $10 million in funding over two years to provide small businesses with additional support in administering the scheme.
- Franchising Code of Conduct: The Government is providing $3 million over two years to implement the Government’s response to the Review of the Franchising Code of Conduct. This includes investigating the feasibility of a licensing model and remaking and updating the Franchising Code of Conduct prior to its expiration in April 2025.
- Additional funding for the Ombudsman: The Government is providing $2.6 million in funding over four years to the Australian Small Business and Family Enterprise Ombudsman to enable the Ombudsman to support unrepresented small businesses in navigating business-to-business disputes through alternative dispute resolution
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