What the federal budget means for small business

The federal government delivered a range of small business-friendly programs and incentives in its recent budget.

Under the Energy Bill Relief Fund, eligible small businesses will receive up to $650 in electricity bill relief.

Under the Small Business Energy Incentive, businesses with aggregated annual turnover of less than $50 million will be able to deduct an additional 20% of the cost of eligible depreciating assets that support electrification and more efficient use of energy.

The incentive will cover a range of depreciating assets, as well as upgrades to existing assets, such as:

• Energy-efficient fridges.
• Heat pumps.
• Electric heating or cooling systems.
• Demand management assets such as batteries and thermal energy storage.

Businesses will be able to claim up to $100,000 of total expenditure under the Small Business Energy Incentive, with the maximum bonus deduction being $20,000

Eligible assets will need to be first used or installed ready for use between 1 July 2023 and 30 June 2024. Eligible upgrades will also need to be made in this period. Certain exclusions will apply such as electric vehicles, renewable electricity generation assets, capital works and assets that are not connected to the electricity grid and use fossil fuels.

The instant asset write‑off will allow small businesses with turnover of less than $10 million to immediately deduct the full cost of eligible assets costing less than $20,000 that are first used or installed ready for use in the 2023-24 financial year. This $20,000 threshold will apply on a per-asset basis, so businesses can instantly write off multiple assets.

The Industry Growth Program will support SMEs and startups to commercialise their ideas and grow their operations. Support will be targeted towards businesses operating in the priority areas of the National Reconstruction Fund.

Under the Cyber Wardens program, small business employees will be able to train as in‑house cyber wardens to learn how to protect their business from cyber security attacks.

Finally, the government will give cashflow relief to about 2.1 million eligible small businesses by reducing the increase in their quarterly tax instalments for GST and income tax in the 2023‑24 financial year, from 12% to 6%. 

If you want to invest in an asset as part of the Small Business Energy Incentive or instant asset write‑off, I can help you finance the purchase.