The Australian government has announced a comprehensive program to support households and small businesses affected by rising energy prices. The program is comprised of several initiatives, each aimed at addressing a specific aspect of the issue.
In the May 2023 Budget, the Australian government announced a surprise surplus, marking a significant turn-around from the $36.9 billion deficit announced in the previous year’s mini-Budget and the $78 billion forecast by the previous government.
Energy price relief
At the core of the support program is the Energy Price Relief Plan, which aims to shield households and small businesses from the worst effects of rising energy prices. The plan is expected to be a significant relief for many Australians who are struggling to manage their energy costs.
The government is also establishing the Energy Bill Relief Fund in partnership with the states and territories. This program will provide up to $3 billion in electricity bill relief to eligible small businesses and households, empowering them to manage their energy costs, improve their operations, and enhance their competitiveness in the market.
Energy Incentive
In addition, the government is introducing the Small Business Energy Incentive, which is a bonus tax deduction aimed at assisting small- and medium-sized businesses in reducing their energy bills, upgrading their facilities, and saving energy. The government hopes this will help up to 3.8 million businesses.
Instant asset write-off
The government is also temporarily increasing the instant asset write-off asset threshold to $20,000 for businesses with a turnover of up to $10 million for one year. This measure is expected to stimulate growth by facilitating the acquisition of new assets by small businesses.
Simplified tax reporting
Moreover, the budget also includes measures to simplify tax reporting and reduce the time spent on tax-related tasks for small businesses. These measures include extending businesses’ time to amend tax returns, trialling an independent review process for small businesses in dispute with the ATO, and expanding access to tax advice through the tax clinic program.
Protection against cyber threats
To safeguard small businesses against cyber threats, the budget introduced a $23.4 million initiative. This initiative aims to help small businesses train in-house cyber wardens and build their capacity to protect themselves against the growing number of cyber threats they face.
Changes to the PBS
As part of the budget measures, the government will decrease the maximum co-payment under the PBS from $42.50 to $30 per script, which will save around 3.6 million Australians more than $190 million in out-of-pocket costs each year.
Medicare and an increase in job seeker
The Labor Party’s first full-year budget includes a $5.7 billion investment in Medicare and an increase in job seeker and commonwealth rent assistance for all ages. The government is also committing $286 million over five years to support the arts and pledging $10 billion for cost-of-living relief.
Boost SME access to lucrative contracts
To increase small businesses’ participation in government contracts, Australia aims to address opaque application processes favouring larger competitors. The government’s ‘Buy Australia Plan’ seeks to level the playing field and boost SME access to these lucrative opportunities. With an allocation of $18.1 million over four years from 2023-24, the plan aims to help small businesses compete for tenders, enhance the AusTender system, and raise SME awareness of federal government contracts.
Financial aid for young carers
Additionally, the Australian government has announced a significant increase in financial aid for young carers who take on additional responsibilities to care for their loved ones while pursuing their education. Carers Australia will receive an additional $10 million in funding to bolster the Young Carer Bursary Program, which provides financial support to young carers between the ages of 12-25. This initiative aims to ease the burden of part-time or full-time work while studying.
The increased funding will increase the bursary amount from $3000 to $3768 and offer around 1600 bursaries each year from 2023 to 2025. However, Australians with a superannuation balance above $3 million will have their concessional rate doubled from 2025, which means they will be taxed at a rate of 30 per cent instead of 15 per cent on their contributions.
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