Tonight, Treasurer Jim Chalmers unveiled his third budget, tackling the persistent challenge of inflation while addressing the broader economic slowdown and global uncertainties.
The Federal Budget 2024 presents a comprehensive set of initiatives aimed at alleviating the cost of living and revitalising the economy, with a particular focus on supporting Australia’s small and medium-sized enterprises (SMEs).
Here’s an overview of the measures tailored to benefit your business:
Cash Flow Relief
- Extended Instant Asset Write-off: Breathe a sigh of relief! The popular $20,000 instant asset write-off scheme has been extended for another year, until 30 June 2025. This means you can immediately deduct the full cost of eligible assets like computers, software, and machinery from your taxable income.
- This injects a significant cash flow boost, allowing you to invest in essential equipment and upgrades without a heavy upfront cost.
This initiative aims to bolster cash flow and reduce compliance costs, providing businesses with the flexibility to invest in necessary equipment. Assets valued at $20,000 or more can be depreciated over time through the small business simplified depreciation pool, further supporting long-term financial planning.
Investment in Skills and Training
- Stronger Vocational Education & Training: The government is investing $26.1 million to strengthen Australia’s vocational education and training (VET) system. This includes funding for a new reporting system for the Australian Skills Guarantee, which ensures businesses are providing the required level of training to their apprentices.
- Additionally, increased support for Jobs and Skills Australia and the National Careers Institute translates to better access to skilled workers and valuable career guidance for your employees.
This funding will facilitate structural reforms, maximise returns on previous investments, and address evolving skills and training needs
Navigating Workplace Changes
- Fair Work Ombudsman Support: Recent changes to workplace laws can be complex. To help you navigate these updates, the budget allocates $20.5 million over four years to boost funding for the Office of the Fair Work Ombudsman.
- This means you’ll have easier access to expert advice and resources to ensure your business is compliant with current regulations.
Dispute Resolution Assistance:
- Empowering the Ombudsman: Running a small business can involve disagreements with other companies. The budget provides an additional $2.6 million to the Australian Small Business and Family Enterprise Ombudsman over four years.
- This strengthens their ability to assist small businesses in resolving disputes through alternative dispute resolution (ADR) methods. ADR offers a faster and more cost-effective way to reach a settlement compared to traditional court proceedings.
Addressing Cost-of-Living Pressures
- Energy Bill Relief Fund: The government is extending the Energy Bill Relief Fund to provide a $325 rebate on your 2024-25 energy bills. This helps alleviate the pressure of rising energy costs, freeing up resources to invest in other areas of your business.
The Energy Bill Relief Fund is extended and expanded over three years from 2023–24.
- Strengthened Paid Parental Leave Scheme: The budget allocates $1.1 billion over five years to strengthen the Paid Parental Leave (PPL) scheme. This includes $10 million specifically to support small businesses with administering PPL for their employees.
- A well-supported workforce is essential for business success, and this investment helps you attract and retain top talent.
This includes provisions to enhance women’s retirement outcomes and streamline the administration of PPL for small business employers.
Mental Health and Financial Wellbeing
- Debt Helpline and Mental Health Support: Recognizing the challenges faced by small business owners, the budget extends funding for the Small Business Debt Helpline and the NewAccess for Small Business Owners program for another two years.
- This ensures continued access to vital financial counselling and mental health support services.
A further $41.7 million over four years from 2024–25 is earmarked to support small businesses through various initiatives. This includes bolstering the Payment Times Reporting Regulator to implement reforms, extending financial counseling and mental health support programs, addressing franchising code of conduct issues, and supporting small businesses in navigating disputes through alternative dispute resolution mechanisms.
Treasurer Jim Chalmers has announced an anticipated surplus of $9.3 billion for the current year, marking a significant milestone with back-to-back surpluses for the first time in nearly two decades. However, he emphasizes that budget pressures will intensify in subsequent years, despite the expectation of meeting the inflation target earlier than forecasted.
In 2024–25, a deficit of $28.3 billion is projected, but overall fiscal outcomes are stronger each year compared to the government’s inception.
Over the span of six years until 2027–28, the budget is fortified by $215 billion. Gross debt is forecasted to reach its peak at 35.2% of GDP in 2026–27, then decrease to 30.2% by 2034–35. Notably, gross debt for the current year stands at $904 billion, significantly lower than the inherited figure of over one trillion, resulting in a $152 billion reduction.
Responsible economic management is yielding dividends, with an estimated $80 billion saved in interest costs over the next decade.
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