The 2022-23 Federal Budget has brought both wins and additional costs for Employers.

Small businesses were among the winners in the 2022-23 Budget. The government has increased tax breaks for SMEs investing in new technology and skills, as well as taxation reforms which should help improve business cash flows. Extra funding in apprenticeships will also be welcomed by small businesses, while extra spending to reduce the burden of red tape should assist in bringing down the costs of doing business.

In this update, we’ve explored all the details and broken down the key items Employers should be aware of – enjoy!! 

1. Overhaul of Apprenticeship Incentive Scheme

$2.8 billion in funding has been allocated for an overhauled apprenticeship incentive scheme to grow the number of qualified trades people by subsidising the wages of select apprentices and trainees, providing up to $5,000 payments to new apprentices (in priority sectors) and up to $15,000 in wage subsidies for employers who take them on. Businesses that take on new trainees and apprentices under these programs may be eligible for hiring incentives as well as a 50% wage subsidy on the wages paid to the apprentice or trainee.

2. Apprentice Wage and Training Programs Extended

In an aim to reduce unemployment and forming part of the Apprenticeship Incentive Scheme overhaul, the Government has confirmed the extension of the Boosting Apprenticeship Commencements and Completing Apprenticeship Commencements wage subsidy programs for a further three months.

3. New Tax Deduction for Small Businesses on Training Expenses

The Government is supporting small businesses to upskill their employees by introducing the Skills and Training Boost. Small businesses (with aggregated annual turnover less than $50 million) will have access to a 20% bonus tax deduction for the cost of external training courses delivered to their employees by providers registered in Australia. This means that for every $100 you spend on training, you can get a $120 tax deduction.

4. Improvements to Parental Leave

Under the changes a working two-parent household will have access to 20 weeks of paid parental leave (PPL), which can be split between new mothers and their partners at their discretion in the two years following their child’s birth or adoption. 

The government has also pledged to broaden the eligibility threshold so that any household with an income of up to $350,000 a year between both partners will be able to make use of the 20-week scheme.

5. More Funding for Women and Children Experiencing Violence

As part of our plan for a stronger future, the Morrison Government is investing $1.3 million in new services to support women, children and vulnerable Australians as well as expanding existing programs and improving our social security safety net.

6. Small Business Technology Investment Boost

Businesses with aggregated turnover of up to $50 million will be able to deduct an additional 20 per cent of expenditure (capped at $100,000) incurred on business expenses and depreciating assets that support digital adoption (e.g. subscriptions to cloud-based services, cyber security systems, portable payment devices).

7. Tourism Support

Around $146.5 million to support the recovery of the Australian tourism sector in response to the pandemic impact, including further assistance for travel agents. Almost half will be rolled out globally as part of a government bid to reignite international tourism after nearly two years of border closures due to COVID-19.

8. Export Support

$80.0 million over 4 years from 2022-23 to provide additional support for small and medium export businesses to re-establish their presence in overseas markets through the Export Market Development Grants program.

9. Government Contracts

More help for SMEs to secure Commonwealth contracts. Under proposed changes, Government departments will be required to split up major projects to give smaller contractors a greater chance to compete for work. The Government has also authorised the Department of Defence to undertake limited tenders with SMEs for procurements up to $500,000 from 1 July 2022.

10. Other Measures

• $5.6 million over 4 years from 2022-23 for the Fair Work Commission to establish a dedicated unit to support small businesses, including unfair dismissals and general protections disputes.
• $25.2 million over 3 years ($18.4 million in 2022-23) to support small business including:
• $10.4 million over 2 years from 2022-23 to enhance and redesign the Payment Times Reporting Portal and Register to improve efficiency and reporting
• $8.0 million in 2022-23 to the Australian Small Business and Family Enterprise Ombudsman to work with service providers to enhance small business financial capability
• $4.6 million over 2 years from 2021-22 to support the New Access for Small Business Owners program delivered by Beyond Blue to continue to provide free, accessible, and tailored mental health support to small business owners; and
• $2.1 million over 2 years from 2021-22 to extend the Small Business Debt Helpline program operated by Financial Counselling Australia to continue to provide financial counselling to small businesses facing financial issues.

11. Award Rate Increases

While not included in the Federal Budget, it is usual practice for the Fair Work Commission to announce increases to National Minimum Wage and Modern Award wage rates in June each year (with effect from July). Be sure to keep an eye out for these updates as they become available.

12. Superannuation Guarantee Increases

Some dates for your diary!!

As most of you will be aware, the Super Guarantee will be gradually  increased from the current rate of 10% to 12%. This stepped increase gives businesses time to plan for the future, as they only need to make small increases each year rather than cope with a 2.5% increase all at once. These increases will take effect on the following dates:

This ATO link might also be useful

https://www.ato.gov.au/rates/key-superannuation-rates-and-thresholds/?anchor=Superguaranteepercentage

For further information regarding the 2022-2023 Federal Budget you can refer to:

https://budget.gov.au/2022-23/content/overview/index.htm