The 2023/2024 Federal Budget: What’s in it for businesses

The Federal Budget 2023-24 is here, and it brings with it an array of incentives designed to support small businesses across the country. 

We’ve compiled a list of the key measures, so you know what’s up for grabs. Dig in to see what support your small business could be getting in the years ahead. 

Energy bill relief 

In response to high energy prices, the government is partnering with state and territory governments to deliver up to $3 billion of electricity bill relief for eligible households and small businesses. From July 2023, around 1 million small businesses will be eligible to get up to $650 off their energy bill. 

Energy incentive 

The government has also put a new tax break on the table – the Small Business Energy Incentive – to help small and medium businesses save on their power bills through smarter energy use. This incentive will provide $310 million in tax relief and support up to 3.8 million businesses making investments like electrifying their heating and cooling systems, installing batteries, and upgrading to high-efficiency electrical goods.¹ 

If your annual turnover is less than $50 million, you’ll have access to a bonus 20 per cent tax deduction for eligible assets that support electrification and more efficient energy usage, from 1 July 2023 to 30 June 2024. Up to $100,000 of total expenditure will be eligible for the incentive, with the maximum bonus tax deduction being $20,000 per business.¹ 

$20,000 instant asset write-off 

Another win for small businesses is the increase of instant asset write-offs. Originally set to drop to $1000 at the end of the financial year, it has been increased to $20,000 for another 12 months – meaning businesses can enjoy getting more money back on eligible assets for longer. 

Up to 3.8 million small businesses with annual turnover of less than $10 million will be able to take advantage of this money-saving incentive.¹ 

Improving small business cash flow 

In another effort to boost small business cash flow, the government will halve the increase in around 2.1 million eligible small businesses quarterly tax installments for GST and income tax in 2023-24. Installments will only increase by 6 per cent, instead of 12.¹ 

Cyber security 

No business wants to have their security compromised. Thanks to a new initiative, there will be more support available for small businesses when it comes to mitigating and reducing the harm of cyber security attacks. 

The government is investing $23.4 million to help small businesses build resilience to cybersecurity attacks by training over 50,000 in-house cyber wardens over the next three years. The Cyber Wardens program help small businesses train in-house cyber experts.¹ 

Industry Growth Program 

A new $392.4 million Industry Growth Program is set to help more SMEs and startups get their innovation on. The program is designed to help those operating in the priority areas of the National Reconstruction Fund to develop new products and services, commercialise them, and ultimately grow their operations. 

Buy Australian Plan 

Many small businesses are often locked out of government contracts, with the application processes typically geared towards bigger corporations. The government wants to help more small to medium businesses win government contracts by building on their Buy Australian Plan. They have designated $18.1 million over four years to increase engagement with these enterprises, improve AusTender, and better their procurement and contract management capability across the Australian Public Service.¹ 

Lowering tax-related administrative burdens 

The federal budget has pledged to reduce the time small businesses spend doing taxes, by introducing a series of initiatives. 

These include: 

• From 1 January 2025, delivering five new tax clinics (including two delivered through TAFEs) to improve access to tax assistance.² 
• From 1 July 2024, allowing small businesses to authorise their tax agent to lodge multiple Single Touch Payroll forms on their behalf.³ 
• From 1 July 2025, granting small businesses up to four years to amend their income tax returns, reducing the burden of making revisions.³

Other important incentives

While these initiatives directly support businesses, there are some that will support them indirectly. We’ve wrapped them up for you below.

Support for parents 

• The government is expanding the Parenting Payment (Single) for primary carers, until their youngest child turns 14 (currently it’s 8 years old). They will invest $1.9 million over 5 years to provide around 57,000 recipients an extra $176.90 per fortnight. 
• Parental Leave Pay and Dad and Partner Pay will combine into a single 20‑week payment that can be shared between parents. Either parent will be able to claim Paid Parental Leave first, and single parents will be able to access the full 20 weeks under the scheme. A new family income test of $350,000 per annum will see nearly 3,000 additional parents become eligible for Paid Parental Leave.² 
• From 1 July 2023, the government will cut the cost of childcare for around 1.2 million families, making it easier for parents and carers, particularly women, to participate in the workforce. They also plan to make the child support system work better by making it easier for employers to withhold child support from a parent’s wages. 

Healthcare 

In this budget, the government is investing $5.7 billion over 5 years from 2022‑23 to strengthen Medicare and make it cheaper and easier to see a doctor. At a cost of $3.5 billion – the largest investment in bulk billing incentives yet – they’re tripling the incentive paid to GPs to bulk bill consultations for families with children under 16 years, pensioners, and Commonwealth concession card holders.

Conclusion 

That’s our breakdown of what small businesses can expect as the Federal Budget 2023-24 comes into effect. We hope it’s helped you understand how it impacts you. 

For more on the Federal Budget 2023-24, check out the official budget website. 

Disclaimers  

1 Australian Government. (2023). Budget Overview. https://budget.gov.au/content/overview/download/budget_overview.pdf  

2 Australian Government. (2023). Budget Strategy and Outlook. Budget Paper No. 1 https://budget.gov.au/content/bp1/download/bp1_2023-24.pdf 

3 Australian Government. (2023). Budget Measures – Budget Paper No. 2  https://budget.gov.au/content/bp2/download/bp2_2023-24.pdf