Cuts to the fuel excise, an increase to the nation’s backpacker and skilled migrant intake, and tax relief for upskilling and investing in digital technology are being offered to small businesses ahead of a looming federal election.
An increase of 10,000 places in skilled migrants to 109,000 this budget is expected to be welcomed by small businesses experiencing worker shortages.
Operators may also benefit from an additional 11,000 places for prospective backpackers in the 2022-2023 financial year.
The government has Working Holidays Maker agreements with 45 countries, with annual caps on 26 countries.
The budget will include a one-off, 30 per cent increase to all country caps.
“This is aimed at helping Australian retail, hospitality and hotel operators fill worker shortages,” the budget paper says.
CPA Australia Senior Manager of Business Policy, Gavan Ord, says the economic benefit of an increase in migration is “very strong.”
These migration number boosts are among of a raft of other measures to help small businesses navigate their way out of the pandemic and into so-called "COVID-normal".
Higher fuel prices as a result of Russia’s invasion of Ukraine are also stretching business operating budgets.
From midnight on March 30, fuel excise will be cut in half, which means for the next six months, Australians will save 22 cents a litre every time they top up their tanks.
The competition watchdog is expected to monitor retailers to make sure savings are passed on in full.
Incentives to invest in technology and upskilling
The Morrison government is providing $1.6 billion in tax incentives for small businesses to invest in digital technology and skills and training.
Starting tonight, for every $100 invested in digital technologies, the government is offering a $120 reduction in tax.
“Every hundred dollars these small businesses spend on digital technologies like cloud computing, electronic invoicing, cyber security and web design will see them get a $120 tax deduction,” says Treasurer Josh Frydenberg and Minister of Small Business Stuart Robert in a joint statement.
The government is offering $3.6 million for small businesses with a turnover of less than $50 million and a 20 per cent deduction for ongoing operating costs and depreciating assets.
Investments of up to $100,000 of expenditure per year will be supported under this new measure.
The boost will apply to expenditures incurred from Tuesday evening until June 30, 2023.
Mr Ord says migrants make up a high proportion of small business owners relative to their population.
The Morrison government is providing $1.6 billion in tax incentives for small businesses to invest in digital technology and skills and training. Source: Getty
He adds many small business owners, such as the estimated 200,000-300,000 Chinese operators in Australia, are over the age of 50 and are less likely to use technology.
There is a real generation divide … When we speak to people, they don’t know what technology is available and how to apply it in their business.
“Encouraging businesses to invest in digital technology is how the government is going to get the biggest bang for their buck,” Mr Ord said.
The budget also includes a $120 tax cut for businesses which spend on upskilling their employees.
“The government's Skills and Training Boost encourages small business to train new staff and upskill existing staff, helping them be innovative and grow,” the joint press statement says.
This year’s budget includes $2.8 billion over the next five years to upskill apprentices while a new incentive scheme aims to simplify the complex system of paying them.
Small businesses will be able to claim a bonus of 20 per cent deductions for the cost of external training courses by Australian registered providers.
The government will enable companies to choose to have their pay as you go (PAYG) instalments calculated based on current financial performance, which they say will lower tax instalments for those who use the method.
Other measures include an allocation of $5.6 million for a small business unit in the Fair Work Commission designed to make it easier to meet workplace obligations and $8 million for them to seek advice from the Small Business Ombudsman.
There’s also $4.6 million for small businesses to access mental health support and $2.1 million for debt counselling and advice.
