SME lens on Budget 2022

Wish the highlights of the Budget papers were in dot points? Well, here they are:

SUPPORTING THE BACKBONE: SME RELIEF

What is proposed

• Some grants received from State Government are considered to be non-assessable, non-exempt income (and therefore are not included in your assessable income). We are yet to see which SA grants will be eligible for this measure.
• SMEs with an aggregated turnover of less than $50 million, get an additional 20% deduction for:
  • external training courses provided to employees; and
  • costs incurred on business expenses and depreciating assets that support their digital adoption. This includes portable payment devices, cyber security systems or subscriptions to cloud-based services.

This means that if you spend $100 on a training course, you can claim a $120 deduction (but be careful with timing – see below).

What’s the catch?

• The external training course provider must be registered in Australia.
• The training must be for employees – we are yet to see whether this would extend to sole traders or partners who are not tehcnically employees in a business.
• The timing is staggered!
  • The external training measure comes into effect from today and ends on 30 June 2024.
  • The digitial adoption costs measure ends in the 2023 financial year.
  • For both measures, where you incur expenditure in this financial year (up to 30/06/2022), you can only claim the additional 20% in the next financial year (ending 30/06/2023). Any expenditure incurred in the 2023 financial year will be deductible in that financial year.
• Expenditure incurred on digital adoption is capped at $100,000.

WORKING FOR THE MONEY: JOBS, JOBS AND JOBS

What is proposed?

• Working Holiday Makers visa holders who arrive in Australia between 19 January 2022 and 19 April 2022 will have their Visa Application Charge refunded.
• Country caps for Work and Holiday visas are increasing overall places available by around 11,000. We hope this provides some relief for agricultural small businesses.
• Support for up to 5,000 disadvantaged young Australians to develop employability skills, providing a pathway to employment services and training opportunities (ReBoot initiative).
• An additional 15,000 low and fee-free training places in aged care courses under the JobTrainer Fund.
• Continued support for businesses who employ mature-aged Disability Employment Services program participants through the Restart Wage Subsidy.
• Extension the trial of career coaching for job seekers of all ages participating in Digital Services under Workforce Australia.
• Support for employers to engage and retain new apprentices, and reform the Australian Apprenticeships system to sustain a skilled and responsive workforce.
• Provision of additional support for small and medium export businesses to re-establish their presence in overseas markets through the Export Market Development Grants program.
• Each measure to create jobs will have its own eligibility criteria.

SNIP SNIP: CUTTING RED TAPE

What is being proposed?

• Removal of the companies annual late review fee.
• Reduction of the number of fees paid for ad hoc lodgements under current requirements.
• Removal of fees for searches conducted on the new registry website.
• The ATO Tax Avoidance Taskforce will continue surveilling multinationals, large public and private groups, trusts and high wealth individuals. Whilst this is not cutting red tape, it will support a fairer tax system to make sure every business is paying their fair share of tax.

Timing?

If accepted, start date is 1 July 2023 for these measures. The ATO task force will continue until 2025.

WHO RUN THE WORLD: WOMEN

What is proposed?

In short, there are a lot of programs being proposed but very little detail:

• Additional support for women who commence in trade occupations that are higher paying trade occupations on the Australian Apprenticeships Priority List.
• Implementation of the recommendations of the review of the Workplace Gender Equality Act 2012.
• New Women’s Health and Leadership Hub at Whitten Oval (Vic) to provide programs promoting girls’ and women’s health and leadership.
• Bringing women into board positions and funding the Future Women’s Jobs Academy.
• Continued support to the Future Female Entrepreneurs program, also known as the Academy for Enterprising Girls.
• Improvement of women’s participation and encouragement of women to consider a career in Australian manufacturing.
• Support to UNICEF Australia and Parents at Work to expand the Family Friendly Workplaces initiative to a further 500 workplaces across Australia.
• Delivery of small, intensive business oriented online financial capability workshops to around 100 applicants through the Boosting Female Founders Initiative program.
• Progress the recommendations of the report of the Independent Review into Commonwealth Parliamentary Workplaces, including establishing Office of Parliamentarian Staffing and Culture (OPSC) and Independent Parliamentary Standards Commission.
• Creation of single Paid Parental Scheme Leave of up to 20 weeks that can be taken by both eligible working parents as they see fit.

DOCTOR DOCTOR: COVID

What is proposed?

• Cost of taking a COVID-19 test to attend a place of work will be tax deductible for the individual from 1 July 2021.
• The cost of the COVID-19 tests supplied by a business will not be subject to FBT.

What’s the catch?

• The devil is going to be in the detail here. We look forward to seeing the legislation and parameters around eligibility and determination of whether the test is ‘in connection with’ work.
• It is yet to be seen whether this measure would include instances of employees who test ‘just in case’ prior to work.
• Substantiation requirements might also cause some difficulty given this relates to all expenditure in this current financial year. For example, how do you prove that you used all five tests in the kit for work purposes (and not for your travel plans or kids)?

OFFSET THAT TAX: LMITO

• The LMITO will be increased by $420 to provide taxpayers relief of up to $1,500 pa, depending on income.
• Proposed changes:

• If passed, this measure will cover the current financial year only.

WIND DOWN: SUPERANNUATION

• 50 per cent reduction of the superannuation minimum drawdown requirements for account-based pensions and similar products has been extended for a further year to 30 June 2023.
• This reduces the amount that retires need to withdraw to qualify for tax concessions.

PUMP IT UP: FUEL

• The fuel excise is being halved for the next 6 months (ending 28 September 2022), resulting in a saving of 22.1 litres.
• The ACCC will monitor the market to ensure that the discount flows through to consumers.

SUMMARY

So close to an election it is anyone’s guess whether any of this Budget is likely to be implemented. Some of the measures are likely to be supported by a Labor government so we will have to ‘wait and see’ what comes from these proposals.

For more information, please contact Lisa Christo (08) 7111 2994.