As usual the team gathered (with pizza of course) eagerly awaiting the budget papers to be released so we could deep dive into what the budget means for you, your business and your super.

Whilst the budget papers were over 1,000 pages long, they offered very little (good or bad) for businesses.

Alan and Steph got together this morning to chat through the few announcements that actually apply to your business.

the economy

The expected surplus is $9.3b with an expected deficit of $1.1b next year.

TOP 5 PRIORITIES

• Reducing cost of living
• Investing in a Future Made Australia
• Strengthening Medicare & the care economy
• Building more homes for Australians
• Responsible renewables and resource management

While the budget focused on these measures, there is barely anything worth mentioning for small business, startups or SMSFs. There were a lot of numbers announced last night, but very little details in terms of how the money will be spent, and more importantly how small businesses access this money. So at the moment we are left waiting for the details.

for small business

Small business barely got a mention again in this year's budget. Here is what we do know……

INSTANT ASSET WRITE OFF

For small businesses with a turnover of less than $10mill the instant asset write off of $20,000 has been extended to 30 June 2025. This will be in effect from 1st July 2023 - 30th June 2025. In practice this means if you purchase a piece of machinery for under $20,000 you will be able to claim a tax deduction upfront rather than having to claim it over several years (known as its effective life).

Any assets over that amount will be able to be added into the small business simplified depreciation pool which means you claim 15% of the cost of the asset in the 1st year and 30% each year thereafter or depreciated based on the effective life.

It’s important to note this $20k amount isn’t $20k cash back in your pocket, it’s simply a tax deduction you claim now rather than over a number of years. So you still need to be making profit in order for this to be beneficial.

APPRENTICE PAYMENTS

The Apprentice Incentive Scheme will have existing payments extended from 1 July 2024. For apprentices in the priority occupations:

For Apprentices: Payments go up from $3k per year to $5k

For Employers: Payments go up from $4k per year to $5k

Similarly, apprentices willing to learn clean energy skills as part of their trade will be eligible to receive up to $10,000 in payments. The scheme already exists, but the government has broadened the eligibility to include apprentices in the automotive, electrical, housing and construction sectors based on industry feedback.

FEE-FREE TAFE SPOTS

20,000 new fee-free TAFE places in courses relevant to the Construction Industry have been announced. This will save some $$$ for employers who pay TAFE fees for apprentices.

ENERGY BILL RELIEF

Small businesses are set to receive a $325 rebate from 1 July 2024 towards energy bill relief. We are still waiting for the details on how this will be administered, but it’s expected to apply to one million small businesses.

ATO FUNDING FOR COMPLIANCE

The ATO will be given $27m to improve the data matching capabilities to ensure super is paid on time. On top of this the government will set targets for the ATO for recovering unpaid superannuation.

PAYMENT TIMES REPORTING

Announced a few years ago the government is funding a Payment Times Reporting Regulator that’s designed to name and shame slow paying big businesses. This is designed to ensure you aren’t waiting 90 days to be paid.

MENTAL HEALTH SUPPORT FOR SMALL BUSINESS OWNERS

NewAcess which was developed by Beyond Blue has been extended. This is tailored mental health support for small business owners featuring an initial 60 min session and then a further 5 30 min sessions with a mental health coach.

spending in general

There were a lot of numbers announced last night, but very little details in terms of how the money will be spent, and more importantly how small businesses access this money.

FUTURE MADE IN AUSTRALIA

Ultimately the Future Made in Australia initiative is designed to support sovereign manufacturing, supply chains & renewable energy transition

Most of these announcements were made prior to the budget, but let’s take a look at the actual amounts set aside, noting we have no details yet.

• $1 billion for the Solar SunShot program to increase the number of Australian-made solar panels
• $2 billion for its Hydrogen Headstart scheme to accelerate the green hydrogen industry
• $470 million to build the world's first "fault-tolerant" quantum computer in Brisbane, matching the Queensland government's contribution
• $840 million for the Gina Rinehart-backed mining company Arafura to develop its combined rare earths mine and refinery in Central Australia
• $230 million for WA lithium hopeful Liontown Resources, which is also partly owned by Gina Rinehart
• $566 million over 10 years for Geoscience Australia to create detailed maps of critical minerals under Australia's soil and seabed
• $400 million to create Australia's first high-purity alumina processing facility in Gladstone
• $185 million to fast-track Renascor Resources' Siviour Graphite Project in South Australia
• A $1 billion export deal to supply Germany with 100 infantry fighting vehicles, manufactured at Rheinmetall's facility in Ipswich

HOUSING

There is a bunch of money set aside ($6.2b) for new housing investment.

for SMSF and super

We are literally at a loss. Absolutely nothing to report from the budget papers for SMSF and Super!

for individuals

Most of these measures were again announced prior to budget night

INCOME TAX CUTS

Another measure that has already been announced and passed are the tax cuts. Currently the tax rates are :

The new rates announced :

What this means in practice is you can expect more money in your weekly pay packet :

HECS CHANGES

Each year on the 1st June anyone with a HECS debt finds themselves owing more. This is due to indexation of your debt and has always been in line with CPI. Last year CPI was 7.1% which increased HECS debts significantly. This is being wound back (to 3.2%) to ensure HECS isn’t indexed by more than the LOWER OF CPI or WPI (Wage price index). A credit will be added to everyone’s account to reduce last year's increase.

PAID WHILE ON PLACEMENT

Under the scheme, those studying nursing, teaching or social work will receive a Commonwealth Prac Payment of up to $319.50 a week, but they will be subjected to means testing.

ENERGY BILL RELIEF

All households will receive a $300 rebate towards energy bill relief. This will be from 1 July.

PAID SUPER ON PARENTAL LEAVE

Not due to start until 1 July 2025, the government will be paying Super on Paid Parental Leave.

what wasn’t mentioned

SUPER BALANCES OVER $3MILL TAX

Announced last year, Individuals with balances over $3million will be subject to an additional tax of 15 per cent on the earnings on any balance that exceeds the threshold.

recap what else changes this year

PAYMENT OF SUPER ON PAY DAY

Due to start 1 July 2026, businesses will be required to pay super for employees on the day you pay payroll. At the moment you are required to pay super Quarterly. This will obviously increase the compliance burden of payroll for all employers.

SUPER CONTRIBUTIONS RATE CHANGE

Although not announced as part of this year’s Federal Budget, it’s important for employers to note that the superannuation guarantee (SG) rate has increased to 11.5% from 1 July 2023 (up from 11% this year)

That means you are putting away an additional 0.5% for super on employees wages. Note from 1 July 2025 this increases another 0.5% to 12%

MINIMUM PENSION AMOUNTS

For those of you who pay themselves a pension from Super we have been enjoying a reduction in the minimum amount you need to draw out of Super each year. This hasn’t been renewed, with the rates now being as follows :

In practice this will increase the minimum pensions for a lot of people

what next

As usual anything announced still needs to be legislated, although there really isn’t a lot in here at all from a business perspective. We will keep you updated via Ninja News as more details in the spending announcements come to light.

Don’t forget Friday Drinks May 31st. RSVP here.

Any questions you have in relation to the budget feel free to shoot these through to one of the team or post up on our socials. We will keep the answers coming on Facebook, Instagram and in Ninja News.