Introduction
The recently unveiled 2023-2024 budget in Australia brings several key measures that will directly impact businesses on every scale, but especially small.
Overall the outlook for small businesses looks positive and this is refreshing to see for small businesses and startups recently hurting from the closure of the NSW Government’s MVP Ventures that provided them with a decent chunk of early-stage capital.
For CFOs and financial controllers, it is crucial to stay informed about these changes and understand how they will affect your company's savings, financial operations, and reporting. We will delve into the budget's significant measures and explore how we can assist finance leaders in navigating this evolving landscape.
Boosting Small Business Support
The budget introduces various initiatives aimed at supporting small businesses and fostering their growth including:
Instant Asset Write-Off Threshold:
- From 1 July 2023, the instant asset write-off threshold returns to $20,000 for a duration of 12 months. This allows eligible small businesses to immediately deduct the full cost of eligible assets, providing an opportunity for accelerated savings and investments.
Small Business Energy Incentive Scheme:
- Under this scheme, an estimated one million eligible small businesses can benefit from a $325 deduction on their power bills. This measure aims to alleviate operational costs and enhance savings for small businesses.
Small Business Energy Efficiency:
- To encourage the adoption of energy-efficient appliances, small businesses can now access up to $20,000 in bonus tax rebates per asset. This incentive creates an opportunity for CFOs and financial controllers to make sustainable choices while optimising tax savings.
Adoption of Artificial Intelligence:
- The budget emphasises supporting small enterprises in adopting artificial intelligence (AI) technologies to improve business processes and increase competitiveness. By leveraging AI solutions, CFOs and financial controllers can enhance their efficiency, optimise financial reporting, and gain a competitive edge over businesses reticent to embrace this new technology.
Simplifying Tax Obligations and Compliance
The budget also includes measures to ease tax obligations for small businesses and streamline compliance processes. Here are some notable provisions:
Quarterly Tax Instalments:
- Quarterly tax instalments for GST and income tax will increase by only 6% instead of the initially planned 12% in 2023-24. This reduced increase provides small businesses with greater financial flexibility and aids in managing cash flow.
Lodgement Penalty Amnesty Program:
- Small businesses with an aggregate turnover of less than $10 million can benefit from a lodgement penalty amnesty program. This program encourages fair engagement with the tax system and ensures a smooth transition while promoting compliance.
Single Touch Payroll Simplification:
- From mid-2024, tax agents will be able to file multiple Single Touch Payroll forms on behalf of their clients, streamlining the reporting process and reducing administrative burden.
Extended Amendment Period:
- Starting from 1 July 2025, small businesses will have up to 4 years to amend their tax returns. This extension provides additional time for review and correction, promoting accuracy in financial reporting
Industry-Specific Impacts
The budget also introduces industry-specific measures that may affect payments and user charges. Finance leaders and business owners should especially note the following:
Cybersecurity Support:
- A $23.4 million program aims to help small businesses protect themselves against cyber threats. CFOs and financial controllers can leverage this program to enhance cybersecurity measures and safeguard financial operations
Industry Growth Program:
- With $392.4 million allocated to the Industry Growth Program, SMEs and startups can access advice and matched funding to develop new products and services. This initiative opens doors for innovation, expansion, and increased mentoring.
Electricity Bill Relief:
- In partnership with state and territory governments, the Australian Government is providing up to $3 billion in electricity bill relief for eligible small businesses. This relief plan, commencing in July 2023, can provide substantial savings on energy costs, varying across different regions.
How Cape Comes into the Equation
Staying in-the-know about the implications of the 2023-2024 budget is essential to maximize savings and optimise financial operations. The measures outlined above offer opportunities to streamline expenses, drive innovation, and strengthen compliance. By utilising our expense management and corporate card solution, financial professionals can seamlessly navigate the changing financial landscape, unlock savings, streamline cash flow, and ensure efficient reporting processes. Cape's innovative platform empowers finance leaders and business owners to make data-driven decisions alongside their employees, maintain cost control and in-policy spending, and drive financial success despite the uncertain economic environment.
Our CEO’s response
Cape’s CEO and Founder, Ryan Edwards Pritchard said:
“We are thrilled to see the Australian government's commitment to supporting local businesses in the 2023-2024 budget. The key measures introduced align seamlessly with Cape's mission to empower financial professionals and business leaders and streamline their expense management. By increasing the instant asset write-off threshold, providing energy incentives, and fostering the adoption of AI technologies, the budget opens up avenues for businesses to thrive and drive growth, especially those on the smaller scale who need it the most.
Our expense management and corporate card solution is designed to simplify financial operations, ensure compliance with expense policies, maximise savings. Ultimately, we want to help CFOs and financial controllers navigate these choppy economic waters by helping them easily track and control expenses, leverage innovative spend management tools, and optimise their financial reporting. We are excited to partner with businesses of every size and vertical across Australia, helping them harness the opportunities presented by the budget and achieve long-term financial success.”
Read more from the Australian Government
The Treasury’s full policy paper on Budget 2023-24 covers every aspect in detail. For small business owners, the section you might want to head to first is ‘What does the Budget mean for your business’ or the full overview.
